-1- IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION FIRST APPEAL NO. 1928 OF 2007 WITH F.A. NOS. 74 OF 2006, 1315 TO 1338 OF 2006 AND 1929 TO 1936 OF 2007 & CONNECTED CIVIL APPLICATIONS. The State of Maharashtra ) (through the Land Acquisition Officer, ) No.11, Pune. )..Appellant versus 1. Santaram Mahadu Pingle ) 2. Maruti Mahadu Pingle ) 3. Kisan Dashrath Pingle ) 4. Dattu Dashrath Pingle ) 5. Dilip Yadav Pingle ) All r/a Deshmukhwadi, Tal. Khed, ) District Pune. )..Respondent Mr. K.K. Tated, Additional Government Pleader, for the appellants in F.A. Nos. 1928 of 2007, 74 of 2006 and 1315 to 1326 of 2006. Smt. G.P. Mulekar, Assistant Government Pleader, for the appellants in F.A. Nos. 1327 to 1338 of 2006. Mr. B.H. Mehta, Assistant Government Pleader, for the appellants in .A. Nos.s 1929 to 1936 of 2007. Mrs. P.H. Potnis for the respondents-claimants. CORAM: SWATANTER KUMAR, C.J. & V.M . KANADE, J. Judgment reserved on : April 25, 2008 Judgment delivered on: May 02, 2008 -2- JUDGMENT (Per Swatanter Kumar, C.J.): In exercise of the powers conferred under Section 4 of the Land Acquisition Act, 1894 (hereinafter referred to as “the Act”), the Government of Maharashtra decided to acquire lands at Village Deshmukhwadi, Taluka Khed, District Pune, for Bhama Askhed Project and thus issued a notification under Section 4 of the Act that provision on 18th June, 1994 which was published on 30th June, 1994. This notification was issued in furtherance to the letter issued by the , Pune, on 16th January, 1993 to acquire these lands for Bhama Askhed Project. In compliance with the provisions of the Act, declaration under Section 6 of the Act was issued on 8th January, 1998 whereafter the Special Land Acquisition Officer(SLAO), after hearing the claimants and considering the evidence produced on record made his award on 31st July, 1997, awarding following compensation to the claimants. “(a) Group I @ Rs. 25,000/- per hector. (b) Group II @ Rs. 29,000/- per hector. (c ) Group III @ Rs. 32,000/- per hector.” As is evident from the above awarded compensation, the land was divided into different groups based upon the nature of the land and -3- separate compensation was awarded for trees, etc. 2. The claimants being dissatisfied with the amount of compensation awarded to them filed applications under Section 18 of the Act before the SLAO who in turn referred the same for determination in accordance with law to the Court of competent jurisdiction. The 12th Ad-hoc Additional District Judge, Pune, vide his award dated 27th August, 2004, enhanced the compensation payable to the claimants to Rs. 1,25,000/- per hector uniformly. While declining to accept the finding of the Collector for grouping of the lands under different categories, the reference Court relied upon Exhibit-46 and upon due computation awarded the said compensation. Following issues were answered in the manner indicated hereinafter by the reference Court: Issues Findings “ 1. Is the claim in time ? ..Yes 2. It is proved that the compensation offered by the Special Land Acquisition Officer is improper and inadequate as per prevailing market value on the relevant date? ..Yes -4- 3. Is the claimants entitle to get enhanced compensation with interest and solatium on it? .Yes 4. If yes, what is the amount? ...As per final order 5. What order and decree?” ..As per final order 3. The findings recorded on the basis of the evidence produced for enhancing the compensation can be usefully referred to as under. 4. The State of Maharashtra being aggrieved from the award dated 27th August, 2004 filed the present appeals. The Court while deciding these references also relied upon the judgment in the present reference in subsequent references being L.A.R. No.141 of 1998, etc. More comprehensive evidence was led by the parties in LAR No. 119 of 1998, while in other cases, some of the evidence led in these cases was led but to a limited extent. Thus, we have preferred to discuss the facts and evidence of LAR No. 119 of 1998 which would squarely apply on fact and law to all other references in the 34 appeals mentioned above. -5- 5. The claimants in that land reference had produced on record Exhibits-11, 12, 13 and 30 which were proved on record. These sale instances relate to the sale of the land in village Pait and the details thereof are as under. Exhibit-11: Land at village Pait. Sale deed dated 10th May, 1990. Area 0.030 Are sold for Rs.6,000/-. Rate per hector Rs. 2 lacs. Exhibit-12: Land at village Pait. Sale deed dated 23rd July, 1990. Area 0.040 Are sold for Rs. 8,000/-. Rate per hector Rs. 2 lacs. Exhibit-13: Land at village Pait. Sale deed dated 3rd April, 1991./ Area 0.055 Are sold for Rs. 12,000/-. Rate per hector Rs. 2,18,182/-. Exhibit-30: Certified copy of the sale deed in respect of village Pait bearing Gat No. 1847/3 which shows the rate per hector Rs. 3 lac and the sale deed registered on 4th November,1991 of area 0.020 Are for a consideration of Rs. 6,000/-.” On the other hand, the respondents produced Exhibits-40 to 46, sale deeds, the details of which are as under:- Exhibit-40: Land at village Pait. Sale deed dated 13th April, 1994. Area 6.750 H. sold for Rs. 1,55,000/- Rate per hector Rs. 22,963/-. Exhibit-41: Land at village Pait. Sale deed dated 13th April, 1994, Area 4.05 H. sold for Rs. 1,10,000/-. Rate -6- per Hector Rs. 27,160/-. Exhibit-42: Land at village Pait. Sale deed dated 13thApril, 1994 . Area 4.05 H. sold for Rs. 1,10,000/-. Rate per Hector Rs. 27,160/-. Exhibit-43: Land at village Roundalwadi. Sale deed dated 31st Decembver, 1991. Rate per Hector Rs. 37,500/- Exhibit-44: Land at village Roundalwadi. Sale deed 29th March, 1993. Area 1.73 hector. Sold for Rs. 45,000/-. Rate per hector Rs. 26,012/-. Exhibit-45: Land at village Pait. Sale deed dated 23rd May,1994. Area 00.41 H. sold for Rs. 20,000/-. Rate per Hector Rs. 48,780/-. Exhibit-46 Land at village Pait. Sale deed dated 21st December 1993 Area 00.80 H. sold for Rs. 50,000/-. Rate per Hector Rs. 62,500/-.” 6. Except the sale instance at Exhibit-46, all the other exhibited sale deeds are of no help to the respondents and have rightly been rejected by the Reference Court as they could not be relied upon in view of the provisions of Section 25 of the Act where the amount of compensation awarded by the Reference Court shall not be less than the amount awarded by the Collector. Reference can be made to a Division Bench judgment of this Court in the case of The State of Maharashtra vs. Smt. Bhimabai Bhika Gondal and others, 2008 (1) BCR -7- 219 in this regard. Thus, these sale instances cannot be considered by the Court. 7. Coming to the evidence led by the claimants, Exhibits-11 and 12 are nearly four years prior to the date of notification under Section 4 of the Act i.e. 18th June, 1994 and as such it is not necessary for the Court to rely upon such sale instances particularly when the evidence by way of sale instances as well as the oral evidence for subsequent period is available on record. In terms of Exhibit-30, the land admeasuring about 00.020 Area was sold for a consideration of Rs. 6,000/-, thus giving a rate of Rs. 3 lakhs per hector on 4th November, 1991. In terms of Exhibit-13, lands admeasuring 00.055 ares was sold for a sum of Rs. 12,000/- on 3rd April, 1991, thus giving a rate of Rs. 2,18,182/- per hector. These are the two sale instances which are admittedly from the adjacent village i.e. Pait. It is not in dispute before us that both these villages have similar situation, potential and location. There is a river between these two villages and these villages are at some distance from the main road and quite away from the Highway. The learned counsel appearing for the claimants had relied upon the decisions of the Supreme Court in the case of (i) Bhagwathula Samanna and others v. Special Tahsildar and Land Acquisition Officer, -8- Visakhapatnam Municipality, AIR 1992 SC 2298, to contend that there should not be a deduction when the lands are already developed. This judgment of the Supreme Court has no application to facts of this case. The lands acquired were already developed and there were roads, drainage, electricity and communication in the vicinity. That is not the case here. Moreso, the sale instances in the present case relate to small pieces of land while in the judgment of Supreme Court, it has clearly been stated that principle of deduction was not an absolute proposition but to depend on the facts and circumstances of a given case. 8. Learned Additional Government Pleader for the State argued that no sale instance from village Shive was produced by the claimants and as such they are not entitled to enhanced compensation granted by the Reference Court. . The respondents themselves produced evidence and not a single sale instance from village Shive was produced. Only relevant piece of evidence i.e. Exhibit P-46 which was produced by the State also related to village Pait. In terms of the sale deed Exhibit-46 dated 21st December,1993, 00.80 hector was sold forRs. 50,000/-, thus giving the rate of Rs. 62,500/- per hector. -9- 9. Besides this documentary evidence led by the parties, the claimants also examined themselves as their own witness and in addition thereto had examined valuers. Shri Dilip was examined as witness No. 1 and he stated that the land in Reference No. 119 of 1998 was near to the lands in Reference No. 251 of 2002 and the quality of the land was the same. In the award of the Collector, it has been noticed that these lands are somewhat similar and also that the land of both the villages i.e. Pait and Shive are 14 kilometres from taluka. In some of the connected matters, the claimants claimed to have produced letters of the MIDC , Exhibits-59 and 60 which are allotment letters issued by the said Corporation in the year 1997 of developed plots. This evidence itself being beyond three years to the date of notification and relate to developed plots would have no bearing on the matters in issue before us. We are of the view that they have no relevance and cannot form basis of computation of compensation payable to the claimants. 10. The learned Reference Court in its judgment by applying some guess work and with reference to Exhibit-30, awarded compensation at the rate of Rs. 1,25,000/-. We are unable to contribute to the reasoning recorded by the learned Reference Court as if Exhibit- -10- 30 (Land Reference No. 119/08) is to be taken into consideration. That being a sale instance of 1991, the claimants would be entitled to first enhancement in the sale consideration as the sale instance is of 1991 and thereafter some value would have to be reduced on account of small pieces of land and other attendant factors. The computation made by the learned Reference Court is not based upon correct reasoning inasmuch as the Court itself noticed “If we take into consideration the sale deed of small portion vide Exh. 30 which definitely give excessive rise. Therefore, this price cannot be taken into consideration as a whole...” and then proceeded to grant compensation on the basis of Exhibit-30. Once the document appear to the Court, upon appreciation of evidence, to be reflecting as an excessive value of the land, then it ought not to have taken into consideration Exhibit-30. We are also of the view that Exhibit-30 gives unreasonably excessive price of the land. Thus it is not safe for the Court to rely upon such a document. 11. The learned Reference Court had followed the evidence and its judgment in LAR No. 119 of 1998 in LAR No. 121 of 1998. 12. Now only two sale instances remain to be considered by this -11- Court, one being Exhibit-13 proved by the claimants and Exhibit-46 proved by the State. We may take into consideration Exhibit-46 at the first instance. On 21st December,1993, land measuring 00.80 Hectares was sold reflecting a rate of Rs. 62,500/- per hector. The notification under Section 4 was issued in the present case on 18th June,1994. In other words, the claimants would be entitled to increase in the value of the land as the exhibits on record clearly show an increase in the sale price of the land of the adjoining village i.e. Pait giving them increase of 12 per cent per annum the value of the land would come to Rs. 66,250/- but at the same time the court cannot ignore the value indicated in the registered sale deed (Exhibit-13).Even Exhibit-12 shows that in the year 1990 the land was sold for a price of Rs. 2 lakhs per hector and there is no evidence on record to show that the said sale deeds Exhibits-11 and 12 had reflected incorrect value or exagerated sale consideration. 13. Thus, it may not be appropriate to determine the fair market value of the land on the basis of Exhibit-46 alone. In terms of Exhibit- 13, the land was sold on 3rd April, 1991 at the rate of Rs. 2,18,182/- giving it again an increase of 12 per cent per year for a period of three -12- years, Section 4 notification being of June, 1994, the price would come to Rs.2,96,728/- on an average. It is a settled principle of law that principle of average can be applied by the Court in determining the fair market value of the land where the sale consideration are varied in different sale instances duly proved by the parties on record and there is no challenge to the bona fide of such sale consideration. The Supreme Court in the case of H.P.Housing Board Vs. Bharat S. Negi and others (2004(2) SCC 184) took the view that it is not necessary to take into consideration all the sale instances which are proved on the record. The Court can take into consideration the average of the relevant sale instances and arrive at a fair market value of the acquired land. Various High Courts have also taken the view that the principle of average can be applied safely to determine the market value. Reference can also be made to the judgment in the case of Shanti Devi vs. State of Harayana (1999(2) PLR 640). The Court held as under: “In fact, in the recent time, the Hon'ble Supreme Court has approved the principle of average for determining the fair market value of the land than any other principle concerning the fixation of fair market value of the land. In this regard, reference can be made to the case titled Baldev Singh Versus State of Haryana -13- and another R.F.A. No.965 of 1992 decided on 14.1.1999, wherein the Court held as under : “In a very recent judgment the Hon'ble Supreme of India in the case of Kanwar Singh and others Versus Union of India J.T. 1998 (7) SC 397 observed that Courts while applying the market value of the land in the adjacent villages or revenue estates must cautiously follow the same as it is not necessary that compensation granted in adjacent villages would itself be a deciding factor for other lands. The Supreme Court also applied the principle of averages / mean to get the correct market value of the acquired land with some element of conjectures or guess in the case of Krishna Yachendra Bahadurvaru Vs. The Special Land Acquisition Officer, City Improvement Trust Board, Bangalore and others AIR 1979 SC 869. “ 14. Now, we may examine the present case in the light of the above stated principle. In order to take the average price of Exhibits 13 and 46 to determine the fair market value of the land in question, it would be necessary to examine certain incidental factors like increase -14- in price. Exhibit 46 had been executed on 21st December, 1993 whereas the notification under section 4 was issued on June 18, 1994. The gap between the two dates is small. Thus, it is not necessary for the court to give an increase for this short period. In any case, there is no evidence on record to demonstrate that there was steep and continuous increase in the price of the land or even its surrounding villages. Thus, in our opinion, it would be appropriate to take the value indicated in Exhibit 46 as it is without adding any element of increase for the short intervening period. Exhibit 13 had been executed on 3rd April, 1991 giving a consideration of Rs.2,18,182/-. The bona fides of these documents are not in question. The notification was issued after more than three years after the date of the sale. Thus, the claimants would be entitled to some element of increase for the intervening period as there is evidence on record to show increasing trend in the sale prices of lands adjacent to the acquired land. If we give an increase on hypothetical basis of 12% per year then value of Exhibit 13 would be Rs.2,96,727/- 15. The average of Exhibits 13 and 46 (after giving rise of 12%) would come to Rs.1,79,613/-. Now, ancillary question that the Court is called upon to consider is whether the average value could be awarded -15- to the claimants on account of compensation per hectare for acquisition of their land or certain reduction shall have to be made keeping in view that the sale instances produced by the respondents or the claimants relate to very small pieces of land. We are of the considered view that some element of deduction would have to be applied. Under Exhibit 13, land ad-measuring only 0.055 ares were sold while under Exhibit 46, area ad-measuring 00.80 Ares was sold. Certainly, the value indicated in these sale instances can be taken into consideration by the court while determining the market value of the land in question but it is necessary to examine that the acquisition was of a huge land and these sale instances would not be a fair indicator of the price relating to such land. The Supreme Court has consistently held that the court should apply principle of deduction on the basis of the sale instances of small piece lands. Reference can be made to the judgment of the Supreme Court in the cases of (i) Krishi Utpadan Mandi Samiti Sahaswan, District Badaun v. Bipin Kumar and another, (2004) 2 SCC 283) and (ii) Lucknow Development Authority vs. Krishna Gopal Lahoti and others, 2007 (12) SCALE 685. Element of discretion has been vested in the courts while determining the extent of deduction that could be applied in such cases. In the case of Atma Singh versus State of Harayana (2008) (2) SCC 568, the Supreme Court held that it is not mandatory to apply -16- deduction on the ground of sale instances being of small plots but it will have to be determined on the facts of each case. In that case, considering the special facts relating to the production of sugar from the land and profitable use of the land for by-products like molasses, etc; the Court reduced the deduction from 30% applied by the High Court to 10% to meet the ends of justice but the principle of deduction was accepted. Reference in this regard can also be made to the judgment of the Supreme Court in the case of Krishi Utpadan Mandi Samiti Sahaswan and Krishna Gopal Lahoti (supra). Of course, it would vary again as to what percentage of reduction should be applied in the facts of a given case. In this case, the land has been acquired not for developing in residential or commercial complexes but for submerging as a result of Bhima Askhed Project. Thus, it is an investment by the State Government for general public utility and good that is to generate electricity and/or to provide irrigation facilities to the agricultural lands of the villages. Keeping in mind that these facts are not even disputed before, they would have to be considered as relevant consideration in applying the element of deduction to the average price of both the afore noticed exhibits. At least, the deduction of 30% would be fair and proper in the facts of the case. The average of Exhibits 13 and 46, we have calculated at Rs.1,79,613/-, 30% of this amount comes to -17- approximately Rs.53,884/- and if this amount is deduced from the average amount of Rs.1,79,613/-, the fair market value comes to Rs.1,25,729/-. The computation arrived at by us is quite close to the compensation awarded by the learned reference Court for different reasons. There is no occasion for this Court to grant to the claimants enhanced compensation or whatever marginal increase found by us in the fair market value of the lands acquired, as no appeals/cross- objections have been preferred by the claimants. 16. In view of our above discussion and keeping in view the fact that the claimants have not filed any cross-objections or appeals against the impugned order, we dismiss all the appeals filed by the State. However, in the facts and circumstances of the case, parties are left to bear their own costs. All Civil Applications are accordingly disposed of. CHIEF JUSTICE V.M. KANADE, J.