FA/2392/2004 1/80 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD FIRST APPEAL No. 2392 of 2004 To FIRST APPEAL No. 2397 of 2004 With CROSS OBJECTION No. 5 of 2008 In FIRST APPEAL No. 2392 of 2004 with Cross Objection No. 6 of 2008 In First Appeal No.2394 of 2004 with Cross Objection No. 7 of 2008 In First Appeal No. 2396 of 2004 with Cross Objection No. 8 of 2008 In FIRST APPEAL No. 2397 of 2004 For Approval and Signature: HONOURABLE MR.JUSTICE A.M.KAPADIA HONOURABLE MR.JUSTICE R.H.SHUKLA ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= FA/2392/2004 2/80 JUDGMENT GUJARAT INDUSTRIAL DEVELOPMENT CORPORATION - Appellant(s) Versus CHEETUBHAI GORDHANBHAI PATEL & 3 - Respondent(s) ========================================= = Appearance: Mr. S.N. Shelat, Sr. Advocate with Mr. Mitul Shelat, for appellant in all First Appeals. Mr. SB Vakil, Sr. Advocate with Ms. Archana Acharya for respondent/respondents/claimants in FA Nos.2392/04 to 2394/04. Mr.A.J.Patel with Mr. Archana Acharya for respondent/ respondents/claimants in FA Nos.2395/04 to 2397/04. Ms. Archana Rawal, AGP for respondent - Special Land Acquisition Officer in FA Nos.2392/04 and 2393/04. Mr. Sunit Shah, GP for respondent – Special Land Acquisition Officer in FA Nos.2394/04 and 2395/04. Mr. RC Kodekar, AGP for respondent – Special Land Acquisition Officer in FA Nos.2396/04 and 2397/04. Ms. Archana Acharya for cross-objectionists. Ms. Archana Rawal, AGP for respondent – Special Land Acquisition Officer. ========================================================= CORAM : HONOURABLE MR.JUSTICE A.M.KAPADIA and HONOURABLE MR.JUSTICE R.H.SHUKLA Date :21.4.2008-1.5.2008 COMMON ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE A.M.KAPADIA) FA/2392/2004 3/80 JUDGMENT 1. The challenge in the instant batch of six First Appeals filed under Section 96 of the Code of Civil Procedure read with Section 54 of the Land Acquisition Act, 1894 ('the Act' for short) and also in the four Cross-Objections filed in respective First Appeals is to the correctness of the judgment and award dated 30.4.2004 rendered in a group of Land Reference Case Nos.1216/96, 1217/96, 1219//96, 1220/96, 1299/96 and 1300/96 by the learned 3rd Joint Civil Judge (SD), Vadodara, by which the market value of the land belonged to the respective claimants which was acquired for public purpose of construction of GIDC Industrial Colony at village Manjusar, Taluka Savli, District Vadodara, has been determined at Rs.108.78 paise per sq.mt. and accordingly it has been held that the claimants are entitled to get market value of their lands at the rate of Rs.108.78 (Rupees one hundred eight and paise seventy eight only) per sq.mt. after deducting the amount awarded in Compensation Case No.15 of 1995. The reference Court has also held that the claimants are also FA/2392/2004 4/80 JUDGMENT entitled to get market price of the Babul tree at Rs.700 per tree. The amount of Rs.15/- per Babul tree awarded to the claimants to be deducted from Rs.700/- (Rs.700/- minus Rs.15/-) and awarded Rs.685/- per Babul tree. The claimants are also held entitled to additional compensation under Section 23 (1A) of the Act and solatium at the rate of 30% under Section 23 (2) of the Act on the amount of market price of the acquired land with interest at the rate of 9% from the date of taking over possession i.e., 30.6.1994 for 12 months and thereafter 15% till realization. The reference Court has also held that the claimants are entitled to interest under Section 28 of the Act on the aggregate amount as per Schedule at the rate of 9% from the date of taking over possession till one year and thereafter at the rate of 15% till the date of payment in the Court. 2. The factual background in nutshell is as follows: FA/2392/2004 5/80 JUDGMENT 2.1. Gujarat Industrial Development Corporation ('GIDC' for short) proposed to the State Government to acquire the lands of village Manjusar, Taluka Savli, District Vadodara, as mentioned in the proposal, for the purpose of construction of GIDC Industrial Colony. On perusal of the proposal, the State Government was satisfied that the lands mentioned therein were likely to be needed for the said public purpose and, therefore, notification under section 4 (1) of the Act was issued which was published in the official gazette on 8.4.1992. The said notification was subsequently corrected and again published in the official gazette on 8.10.1992. The owners whose lands were proposed to be acquired, the description of which is given in the schedule annexed with the impugned judgment and award, were served with a notice under section 4 of the Act and inquiry was conducted. On conclusion of the inquiry, a report as contemplated by Section 5A (2) of the Act was forwarded by the Special Land Acquisition Officer FA/2392/2004 6/80 JUDGMENT to the State Government. On consideration of the same, the State Government was satisfied that the lands specified in the notification under Section 4 of the Act were needed for construction of GIDC Industrial Colony and, therefore, the declaration under Section 6 of the Act was made which was published in the official gazette on 19.4.1993. The said notification was corrected and again published in the official gazette on 24.6.1993. Thereafter the interested persons were served with notices for compensation payable to them. The claimants appeared before the Special Land Acquisition Officer and claimed compensation at the rate of Rs.300 per sq.mt. The Special Land Acquisition Officer awarded compensation at Rs.9/- and Rs.11/- per sq.mt., in Compensation Case No.15 of 1995 by award dated 4.5.1995. The claimants found that the offer of compensation made by the Special Land Acquisition Officer was totally inadequate and, therefore, they submitted an application under Section 18 of the Act to refer their cases to the Court for the purpose of determination of just amount of compensation FA/2392/2004 7/80 JUDGMENT (market value) payable to them. Accordingly the Special Land Acquisition Officer referred their cases to the District Court of Vadodara where they were registered as stated earlier. 2.2. The following witnesses have been examined on behalf of the claimants: (i) Cheettubhai G. Patel, claimant of Land Acquisition Reference No.1299 of 1996 and respondent of FA No.2392 of 1996 – Ex.24. (ii) Rasheshbhai B. Patel, President of Amarnath Labour Construction Cooperative Society – Ex.163. (iii) Dinesh Tadvi, Range Forest Officer of Forest Department, Ex.171. 2.3. On behalf of the Special Land Acquisition Officer, the following witnesses are examined: (i) Becharji S Pandor, Assistant Manger, GIDC, Ex.184, FA/2392/2004 8/80 JUDGMENT (ii)Shabbirhusain Mahmedhussain Saiyed, Special and Acquisition Officer/OSD – Ex.163. 2.4. For determination of the market value of the lands acquired, on behalf of the claimants, reliance is placed on the sale instances produced at Ex.174 and 175. They are the documents in respect of N.A. lands which were at a distance of 1.5 km. from the acquired lands. The said lands were sold on 2.6.1992 and 2.4.1992 in consideration of Rs.83/- and Rs.134.56 per sq.mt. On behalf of the Special Land Acquisition Officer reliance was placed upon the documents which were considered by him at the time of passing the award. 2.5. On appraisal of the evidence adduced by the parties, the reference court opined that Exs.174 and 175 which are of the sale instances of N.A. lands of the nearby vicinity of the land acquired and also proximate in time of the issuance of the notification under Section 4 of the Act are the relevant documents which can be FA/2392/2004 9/80 JUDGMENT relied upon for determination of the market value of the acquired agricultural lands. Out of the above mentioned two documents, Ex.174 is a sale instance in respect of the land bearing S.No.75/P and the sale was effected on 2.6.1992 wherein the price of the land was fixed at Rs.83/- per sq.mt. Ex.175 is a sale instance in respect of the land bearing S.Nos.696/987 and the sale was effected on 2.4.1992 wherein the price of the land was fixed at Rs.135.56 paise per sq.mt. The reference Court, therefore, took the average price of the above mentioned two sale instances and has come to the conclusion that the market value of the land in the immediate vicinity at the relevant time was Rs.108.78 per sq.mt. and accordingly determined the market value of the acquired land at Rs.108.78 per sq.mt. On the basis of the above referred to evidence, the reference court has come to the conclusion that the claimants are entitled to the market value of Rs.108.78 per sq.mt. after deducting the amount of compensation awarded and paid to them by the Special Land Acquisition Officer. The reference Court also FA/2392/2004 10/80 JUDGMENT held that the claimants are entitled to get market price of Rs.700 per Babul tree and after deducting the amount of Rs.15/- per Babul tree awarded and paid by the Special Land Acquisition Officer, the claimants are entitled to Rs.685/- per Babul tree. Besides this, it is also held by the Reference Court that the claimants are also entitled to statutory benefits and additional compensation under Section 23 (1A) of the Act as well as solatium under Section 23 (2) of the Act and interest under Section 28 of the Act. 2.6. It is this judgment and award which has given rise to instant batch of six First Appeals at the instance of the appellant, the acquiring body-GIDC and four cross-objections at the instance of the original claimants. 2.7. For ready reference, the details as to the names of the claimants, First Appeals Nos., Land Reference Cases, Block Nos. and measurement of the land acquired from each claimant as well as the total measurement of the lands acquired FA/2392/2004 11/80 JUDGMENT from all the claimants/respondents, are as per the following chart: Name of the claimant First Appeal No. L.A.R. No. Cross- Objecti on No Block No. Land Acquired Sq. Mt. Cheettubhai G Patel 2392/04 1299/96 5/08 1514 1,08,053 Dhirendrabhai Patel 2393/04 1216/96 1786 47,550 Chhotabhai J Patel 2394/04 1217/96 6/08 1815 1,44,873 Prafulbhai M Patel 2395/04 1219/96 1794A&B 7,892 Motibhai J Patel 2396/04 1220/96 7/08 1814 30,756 Rajeshbhai M 2397/04 1300/96 8/08 1539 78,408 Total lands acquired 2,87,532 =================================================== 3. Mr. S.N. Shelat, learned Senior advocate with Mr. Mitul Shelat, learned advocate for the appellant- GIDC, in support of the appeals, has raised the following contentions: (A) The notification under Section 4 of the Act was for acquisition of 32 lakhs sq.mt. of land of village Manjusar. Out of these 32 lakhs sq.mt. of lands, owners of 29,12,468 sq.mt. of different types of lands have consented to take Rs.10.75 and Rs.17.30 per sq.mt. as well as other FA/2392/2004 12/80 JUDGMENT statutory benefits under Section 23 (1A) and 23 (2) and interest by way of consent award and accordingly a consent award was made in favour of those land owners whereas the claimants whose lands in all admeasuring 2,87,532 sq.mt. did not accept the consent award and sought for the reference. Mr. Shelat has further contended that the reference court while passing the impugned award ought to have considered the consent award made in favour of several other owners of the land and ought not to have awarded any amount more than what was awarded to the owners of those lands in whose favour consent award was made. It is a settled legal position that consent award can be looked into as it is an award under Section 11 (4) of the Act. In support of the aforesaid contention, he has relied upon the following two decisions: (i) Major Pakhar Singh Atwal v. State of Punjab, AIR 1995 SC 2185; and (ii)ONGC v. Sendhabhai Vastram Patel, 2005 (7) JT 465. FA/2392/2004 13/80 JUDGMENT (B) According to Mr. Shelat, Block No.1786 and 1794 were purchased by the claimants vide sale deeds dated 3.8.1991 and 21.10.1991 for consideration of Rs.9.50 per sq.mt. and Rs.9.79 per sq.mt. respectively. The notification under Section 4 of the Act for acquisition of the lands was issued on 8.10.1992. Since both these documents have been admitted by this Court by way of additional evidence, for the purpose of determination of the market value of the acquired lands, this Court can look into these two documents. According to him, if this Court considers these two documents then the claimants cannot be awarded any amount more than the amount mentioned in these two sale instances. In the said sale instances dated 3.8.1991 and 21.10.1991 there is no reference with regard to the agreement dated 16.6.1980 as claimed by the claimants. The lands covered by the said sale deeds were situated in agricultural zone and they were, therefore, the most relevant documents for determining the market value of the acquired FA/2392/2004 14/80 JUDGMENT lands. To buttress the aforesaid submission, he placed reliance on the following decisions: (i) Shakuntalabai v. State of Maharashtra (1996) 2 SCC 152; (ii)Special Deputy Collector v. Kurra Sambasiva Rao, (1997) 6 SCC 41; (iii)Land Acquisition Officer, Revenue Divisional Officer, Nalgonda (Andhra Pradesh) v. Morisetty Satyanarayana, (2002) 10 SCC 570; (iv)Union of India v. Pramod Gupta, (2005) 12 SCC 1; (v) V. Subrahmanya Rao v. Land Acquisition Zone Officer, (2004) 10 SCC 640; (vi)Ranvir Singh v. Union of India, (2005) 12 SCC 59; and (vii) Krishi Utpadan Mandi Samiti, Sahaswan v. Bipin Kumar, AIR 2004 SC 2895. (C) Mr. Shelat has further submitted that the reference court has committed a grave error of law and facts in relying upon the two sale deeds Ex.174 and 175 for determining the market value of the acquired agricultural lands of the FA/2392/2004 15/80 JUDGMENT claimants. The sale deed, Ex.174, was effected on 2.6.1992 in respect of the land bearing S. No.75/P admeasuring 6400 sq. mt. in consideration of Rs.83 per sq.mt. whereas the sale deed, Ex.175, was effected on 2.4.1992 in respect of the land bearing S.Nos.696/987 admeasuring 1821 sq.mt. in consideration of Rs.134.56 per sq.mt. According to him, these two sale instances could not have been relied upon by the reference court for determination of the market value of the acquired agricultural lands of the claimants for the following reasons: (i) They are sale deeds in respect of non- agricultural lands by a commercial company in favour of another commercial company; (ii)The determination of compensation in instant case is admittedly for agricultural land; (iii)There is no evidence to show that the acquired lands were developed or there was any application for non-agricultural permission made when the Section 4 notification was issued; (v) The acquired lands were not proximate to the FA/2392/2004 16/80 JUDGMENT lands covered by the sale instances relied upon by the reference court. The acquired lands are situated at a distance of 1.5 km. from the lands covered under the two sale instances relied upon by the reference court and that too leaving the road. In support of the aforesaid contention, he has relied upon the following decisions: (i) ONGC v. Sendhabhai Vastram Patel, 2005 (7) Judgment Today, 465; (ii)Viluben v. State of Gujarat, (2005) 2 GLH 779; (iii) Land Acquisition Officer v. Jasti Rohini (Smt.) (1995) 1 SCC 717; (iv)Basantkumar v.Union of India, (1993) 11 SCC 542; (v) Printers House Ltd v. Saiyadan (1994) 2 SCC 133; (vi)Shaji Kuriakose v. Indian Oil Corporation Limited, AIR 2001 SC 3341; (vii) Ranvir Singh v. Union of India, AIR 2005 SC 3467; and (viii) Gafar v. Moradabad Development Authority, (2007) 7 SCC 614. FA/2392/2004 17/80 JUDGMENT (D) Mr. Shelat has further submitted that the agreement to sell, i.e., Banakhat relied upon by the claimants which is on record at Ex.48 is a xerox copy and it cannot be called as a comparable sale instance because it was with the promoter of a Company Rajiv Suraiya. The agreement to sell i.e., banakhat, was dated 30.1.1992 after the process of land acquisition was initiated because the notification under Section 4 of the Act was published on 8.10.1992. It cannot be relied upon for the following reasons: (i) That the agreement is void; (ii) Agreement is in favour of non- agriculturist; (iii) It is old tenure land; (iv) Para 4 recite that he is non- agriculturist and use is for industrial purpose; (v) Under Section 63 of the Bombay Tenancy and Agricultural Lands, 1948, the agreement is void and no reliance can be placed on a void document; FA/2392/2004 18/80 JUDGMENT (vi) The appellant does not object xerox copy being taken on record. 3.1. On the aforesaid premises, according to Mr. Shelat, determination of the market value of the acquired land at Rs.108.78 per sq.mt. Is absolutely on higher side and without any evidence on record. Therefore, according to him, the impugned judgment and award deserves to be modified and the claimants may be awarded only Rs.17.30 per sq.mt., for their acquired agricultural lands as it is the amount which is awarded by consent award to the owners of the lands whose lands also came to be acquired by the same notification under section 4 of the Act. He, therefore, urged to allow the First Appeals and thereby to modify the award by reducing the amount of market value to Rs.17.30 per sq.mt., together with other statutory benefits available under the Act. 3.2. So far as cross objections filed by the claimants in respective appeals are concerned, FA/2392/2004 19/80 JUDGMENT according to him, there is no substance in the cross objections and since they are merit less deserve to be dismissed. He, therefore, urged to dismiss the cross-objections. 4. Mr. Sunit Shah, learned GP, Ms. Archana Rawal, learned AGP and Mr. RC Kodekar, learned AGP for the respondent – Special Land Acquisition Officer, have adopted and supported the submissions advanced by Mr. S.N. Shelat, learned Senior advocate for the appellant - GIDC and contended that the reference court has committed a serious error in relying upon Exs.174 and 175 which are sale instances in respect of non- agricultural lands and they cannot be compared with while determining the market value of agricultural lands, for the following reasons: (i) The lands sold by the sale instances relied upon by the reference court were not agricultural lands. They were NA lands and the transaction was between two commercial companies. (ii)The lands sold by the sale instances relied FA/2392/2004 20/80 JUDGMENT upon by the reference court were not neighbouring lands as they were situated on the other side of the road which was an industrial area. There was no proximity of sale instances and the acquired land. (iii) The area of the lands covered under the sale instances was very small in comparison to the lands acquired. It was a small portion of land admeasuring 6400 sq.mt. and 1821 sq.mt. (iv)When the sale instances of agricultural lands are available for the same period, the sale instances of NA land should not have been taken into consideration for determination of the market price of the acquired agricultural lands of the claimants. 22 sale instances in respect of agricultural lands were available and they were relied upon by the Special Land Acquisition Officer for determining the price of the acquired land. (v) Market value of fully developed land cannot be compared with wholly undeveloped land although they may be adjoining or situated at a little distance. For determining the market value the FA/2392/2004 21/80 JUDGMENT nature of the land plays an important role. (vii) Sale instance of a small parcel of land will not form the basis to determine market value of large tract of land. In the case of large tract of land, proper deduction should be made. (viii) Banakhat produced at Ex.48 is wrongly relied upon by the reference court. The said banakhat dated 30.1.1992 is entered into with the promoter of the company Mr. Rajiv Suraiya. The said document has been prepared after the process of acquisition started. The proposal for acquisition of land for the appellant GIDC was approved by the State Government on 11.4.1991. Thereafter joint measurement was carried out before issuing notification under Section 4 of the Act on 8.10.1992. 4.1. On the aforesaid premises, it is submitted by them that the impugned judgment and award of the reference court determining market value of the acquired land at Rs.108.78 per sq.mt. cannot be sustained as it is absolutely exorbitant and on higher side. Therefore, FA/2392/2004 22/80 JUDGMENT according to them, the impugned judgment and award deserves to be modified to the extent of awarding Rs.17.30 per sq.mt., which was the amount awarded to the owners of the lands whose lands also came to be acquired by the same notification under section 4 of the Act, by consent award entered between them the GIDC. They, therefore, urged to allow the appeals by modifying the award accordingly. 4.2. So far as the cross objections are concerned, according to them, they are absolutely meritless and no evidence is produced to sustain the claims and, therefore, the same may be dismissed. 5. Mr. S.B. Vakil, learned Senior advocate and Mr. A.J. Patel, learned advocate with Ms. Archana Acharya, learned advocate who appear for the respective claimants, have raised the following contentions: (A) The lands acquired were old tenure agricultural lands. Only two parcels of the FA/2392/2004 23/80 JUDGMENT acquired lands, that is, Block Nos.1786 and 1794/A and 1794/B, were new tenure lands. They were located in the midst of areas developed or under industrial development as evidenced inter alia by the purpose of land acquisition itself. They had great potentiality for non-agricultural use even on the date of issuance of notification under Section 4 of the Act. (B) The reference court has arrived at the market value of Rs.108.78 per sq.mt. by taking the average rate of the sale prices of two sale instances, namely (i) the sale deed dated 2.6.1992 of the land bearing Block No.75/P admeasuring 6400 sq.mt. at Rs.83/- per sq.mt. of village Manjusar i.e., the same village in which acquired lands are situated (Ex.174) and (ii) the sale deed dated 2.4.1992 of the land bearing Block No.696 of village Manjusar admeasuring 1821 sq.mt. at Rs.134.56 per sq.mt. (Ex.175). The land owners of of the lands covered by these two sale instances obtained NA use permission for these lands only shortly before the sale deeds were FA/2392/2004 24/80 JUDGMENT executed in 1992. The lands were undeveloped at the time of sale. With respect to the contention of the appellant that the sale instances being of relatively smaller area than the lands acquired and the acquired lands being agricultural, the reference court erred in awarding compensation on the basis of these sale instances, Mr. AJ Patel has submitted that merely because the vendors of the lands covered by the sale instances had just before executing the sale deeds obtained NA permission has no significance or impact on the fixation of the sale price of agricultural lands. The market value would depend on the location, nature and quality of land. The lands acquired and the lands covered by the sale instances are all located in developing area of the same village - Manjusar and had similar building potentialities. The lands covered by the sale instances were subject matter of sale between private parties and the lands under acquisition were notified for compulsory acquisition for building a township for a public body. Since the lands under the acquisition are subject to the FA/2392/2004 25/80 JUDGMENT proceedings of compulsory acquisition of land, no question of the land owners obtaining NA permission arose. However, that made no difference to the equal potentiality of the lands under acquisition and the lands covered by the sale instances. Mr. Patel has asserted that obtaining of NA permission for the lands covered by the sale instances is a distinction sought to be made by the appellant without any difference vis-a-vis determination of market price. According to him, there is no hard and fast rule that in ascertaining the market value of an agricultural land on the basis of a comparable sale