-1- IN THE HIGH COURT OF BOMBAY AT GOA FIRST APPEAL NO. 214 OF 2005 WITH MISCELLANEOUS CIVIL APPLICATION NO.893 OF 2008 Shri Krishnanath Baburao Naik Redualdo de Costa's Bldg. Margao. .....Appellant V e r s u s 1. Dy. Collector (LAO ) Panaji 2. The Chairman, Goa Daman & Diu, Housing Board, Junta House, Panaji Goa. …...Respondents Mr. R. G. Ramani, Advocate for the Appellant. Mr. M. Salkar, Additional Government Advocate for Respondent no.1 Mr. A. N. S. Nadkarni, Senior Advocate with Mr. H. D. Naik, Advocate for Respondent no. 2. CORAM : A. S. OKA F. M. REIS, JJ. Judgment Reserved on : 1st July, 2010. Judgment Pronounced on : 26 th July, 2010. JUDGMENT (Per F. M. Reis, J.) The Appeal challenges the Judgment and Award dated 21st April, 2005, passed by the learned IIIrd Addl. District Judge, South Goa, Margao, in Land Acquisition Case no. 17/1986, whereby the reference under Section 18 of the Land Acquisition Act, filed by the Appellant, came to be rejected. 2. By notification under Section 4 of the Land Acquisition Act, 1894, (hereinafter referred to as 'the said Act'), bearing no. 22/118/80-RS dated 10th November, 1980, published in Official Gazette dated 20th November, 1980, the land -2- of the Appellant came to be acquired for the Housing Scheme at Davorlim. An area of 22,308 square metres was acquired from the property surveyed under no. 11/0, which belonged to the Appellant. By an Award passed by the Land Acquisition Officer dated 25th January, 1983, under Section 11 of the said Act, the compensation was fixed at the rate of Rs.6/- per square metre for the acquired land besides an amount of Rs.23,363/- for the trees therein. Being dissatisfied with the said compensation, the Appellant preferred a reference under Section 18 of the said Act for enhancement of compensation and prayed for compensation for the land acquired at the rate of Rs.100/- per square metre. By the impugned Judgment and Award dated 21st April, 2005, the reference filed by the Appellant came to be rejected. 3. Shri Ramani, the learned Counsel appearing for the Appellant, submitted that the Reference Court has totally erred in rejecting the reference filed by the Appellant. He further submitted that the land of the Appellant is located in the outskirts of Margao City and, as such, had substantial potentialities for being used for non-agricultural purposes. He further submitted that the land of the Appellant is in the vicinity of the land which was the subject matter of the acquisition of the land of one Numene D' Souza, wherein the compensation was finally fixed at the rate of Rs.50/- per square metre in an acquisition which had taken place much before the present acquisition. He further submitted that the Reference Court has totally misdirected himself in concluding that the Appellant had failed to establish his claim for enhancement of compensation. The learned Counsel further submitted that an application was filed for additional evidence under the provisions of Order 41 Rule 27 of the Civil Procedure Code, whereby the -3- Appellant wanted to rely upon the Agreement of Sale dated 21st May, 1976, by which, the land acquired was agreed to be purchased from the original owners Domingo Jose Martinho Fernandes and his wife at the rate of Rs.5.50 per square metre. He further submitted that the Appellant had sought permission to use the said land for residential purpose and a conversion Sanad was granted by the Collector on 30th July, 1980, under the Land Revenue Code. He further submitted that the land acquired was purchased by two different Sale Deeds dated 31st March, 1980 and 2nd February, 1981. He further submitted that as such, the Appellant desires to rely upon the said Agreement dated 21st May, 1976 as well as the Sale Deeds dated 31st March, 1980 and 2nd February, 1981 in support of his claim for enhancement of compensation as the same are relevant for the disposal of the above Appeal. He further submitted that by an Order passed by this Court, the said application was to be considered at the time of the hearing of the Appeal. The learned Counsel has pointed out that even assuming that the land was purchased at the rate of Rs.5.50 per square metre in the year 1970, considering the escalation in the land valued at the rate of 15 percent per annum, the Appellant was entitled for much higher compensation for the land acquired considering that the conversion for non-agricultural purpose was already obtained much before the Section 4 Notification. The learned Counsel has further submitted that the Reference Court has totally misdirected himself in rejecting the reference filed by the Appellant. 4. On the other hand, the learned Senior Counsel appearing for the Respondents have disputed the claim of the Appellant and submitted that the Reference Court has applied the well settled principles provided under Section 23 -4- of the Act in refusing the enhancement of compensation sought for by the Appellant. He further submitted that there is no evidence on record to substantiate the claim of the Appellant that the market value of land awarded by the Land Acquisition Officer was inadequate and, as such, the Appellants have failed to discharge their burden. The Learned Senior Counsel further submitted that the land of Numene D' Souza cannot be compared with the land acquired as the Sale Deed produced at exhibit Aw.4/B was more than three years after the Section 4 Notification. He further submitted that the land of Numene D' Souza, which was the subject matter of the acquisition wherein the compensation was fixed at the rate of Rs.50/- per square metre, was admitted to be close to the public road and with all civic amenities like College, public transport, etc., which is not the case with the land acquired in the present case. He further submitted that the land in the present case was much in the interior as against the land of the said Numene D' Souza. He further submitted that the Appellant has failed to establish that he is entitled for enhancement of compensation for the land acquired. With regard to the said Sale Deed sought to be relied upon by the Appellant, the learned Senior Counsel for the Respondent has submitted that even assuming that the said Sale Deeds are considered, the value of land as awarded by the Land Acquisition Officer is just and proper as on the date of Section 4 Notification. He further submitted that there is no justification given by the Appellant as to why the said Sale Deeds were not produced before the Reference Court. As no reasons have been forthcoming, the Appellant is not entitled for any leave to produce the documents under Order 41 Rule 27 of the C.P.C. In the circumstances, he submitted that the Appeal deserves to be rejected. -5- 5. Having heard the learned Counsel and on perusal of the record, the following point for determination arises in the present Appeal. POINT FOR DETERMINATION 1. Whether the Reference Court was justified to refuse any enhancement in compensation for the land acquired of the Appellant ? 6. Dealing with the application filed by the Appellant under Order 41 Rule 27 of the Civil Procedure Code, we find that the documents sought to be produced are in respect of the same property which was subject matter of the acquisition. The documents include the Agreement of Sale executed by the original owners Domingo Jose Martinho Fernandes and his wife in favour of the Appellant whereby the property which was a subject matter of the acquisition was agreed to be purchased for a sum of Rs.5.50 per square metre pursuant to which possession was delivered to the Appellant. Apart from that, the next document is the permission obtained under the provision of Land Revenue Code whereby a Sanad was issued on 30th July, 1980 in respect of the same property. The other documents are the Sale Deeds which were executed pursuant to the said Agreement for sale. In fact, the Reference Court whilst deciding the reference has taken an exception to the fact that the Appellant had failed to produce the said Sale Deed. This fact about the agreement was brought out in the cross examination of Aw.5 at page 3 to the effect that vide Agreement dated 21st May, 1976, the Appellant had agreed to purchase the entire property having a total area of 23,043 square metres. This shows that the said documents were referred to in the evidence of Aw.5. As such, irrespective of the fact as to whether there is any justification on the part of the Appellant to produce the said documents at this stage, nevertheless, we find that the said document would be relevant for the -6- purpose of determining the market value of the land acquired considering that they are pertaining to the same land and which was the subject matter of the acquisition. Besides that, the Sanad of the Collector would also help this Court to assess the market value of the land acquired as on the date of Section 4 Notification. In fact, the Apex Court in the Judgment reported in 2009 AIR SCW 2962, in the case of Mahesh Dattatray Thirthkar vs. State of Maharashtra has held at para 37 that the compensation provision of the Act is in the nature of a welfare stipulation and thus the State Government must be just and fair to those whose land is acquired. It is not just and fair to deprive the owner of any property without payment of its true market value, especially when the law provides that the same shall be paid. As such, in order to arrive at a just compensation, we find that the Appellant should be permitted to rely upon the said Agreement as well as the Sanad and the Sale Deeds sought to be relied upon. As such, the Appellant is permitted to rely upon the said documents referred to in the application filed in Misc. Civil Application no. 893/2008. Considering that the Agreement as well as the Sale Deed are in respect of the same land which has been acquired, we find that no purpose would be served to remand the matter to ascertain the comparability of the land. The said application stands accordingly disposed of. 7. In support of the claim for enhancement of compensation, the Appellant has relied upon the Sale Deed dated 17th December, 1983, which is at exhibit Aw.4/B, whereby the land was sold at the rate of Rs.68.89 per square metre. He has also relied upon the decision of the Apex Court at exhibit Aw.4/A, wherein an area of 3010 square metres of land was acquired in the year 1971 for the construction of the road and the compensation was fixed by the Apex Court at the -7- rate of Rs.50/- per square metre. With regard to the land which was the subject matter of the acquisition in the year 1971, we find that there is no evidence on record to show the comparability between the land acquired and the land which was the subject matter of the said land acquisition in the year 1971. In fact, Aw.5, who was the Power of Attorney of the claimant, has in his cross examination, admitted that the said land of Numene D' Souza acquired in the year 1971 was close to the public road and close to all civic amenities like colleges and public transport. This itself shows that the land acquired and the land subject matter of the said decision are not comparable considering that the land of the Appellant was located in Davorlim Village, where no civic amenities were available as on the date of Section 4 Notification. In such circumstances, the Reference Court was justified in discarding the determination of the value in respect of the said land which was acquired in the year 1971. The other sale instance sought to be relied upon by the Appellant is a Sale Deed dated 17th December, 1983. The Notification in the present case was issued in November, 1980, while the said Sale Deed is a post Notification Sale Deed apart from the fact that the land therein is part of the same land which was subject matter of the acquisition in the year 1971 and in respect of which we have already held that there is no evidence on record to show the comparability of the land acquired viz a viz the said land. The learned Reference Court has also rightly discarded the said Sale Deed for the purpose of determining the market value of the land as on the date of Section 4 Notification relying upon the Judgment of the Apex Court in the case of Karan Singh & Ors. vs. Union of India reported in (1997) 8 S.C.C. 186). The valuation report of Aw.2 cannot be considered as the same was not on the basis of any comparable Sale Deed. In fact, the said valuer has stated that there was no sale of land of the same Village in -8- the year 1980 and as such he had not taken any Sale Deed for valuing the land acquired. This opinion evidence has no relevance for the purpose of determining the market value of land as on the date of Section 4 Notification. Aw.1 in his deposition has relied upon only the Sale Deed dated 17th December, 1983 for the purpose of seeking enhancement of compensation. We have already discarded the said Sale Deed for reason stated herein. 8. For the purpose of determining the compensation under the provisions of Section 23 of the Act, the Apex Court has held in the case reported in1980 (1) S.C.C. 575, in the case of Bangaru Narasingha Rao Naidu & Ors vs. Revenue Divisional Officer, that the law is well settled that the best evidence of the market value of the land is afforded by transactions of sale in respect of the very acquired land. The Apex Court in another Judgment reported in 1991 (4) S.C.C. 195, in the case of Periyar and Parekanni Rubbers Ltd., vs. State of Kerala, has observed that when the Courts are called upon to fix the market value of the land in compulsory acquisition, the best evidence of the value of the property is the sale of the acquired land to which the claimant himself is a party in the absence of sales of neighbouring lands. The Apex Court in the case of Ranvir Singh & anr. vs. Union of India reported in 2005 (12) S.C.C. 59, has held that it is a well settled principle that the Sale Deeds pertaining to the portions of the land which are the subject matter of acquisition will be the best related piece of evidence for assessing the market value of the land acquired. The Reference Court has also relied upon the Judgments in the case of State of M. P. vs. Shantabai reported in 1995 Supp (2) S.C.C. 28 and in the case of V. M. Salgaonkar & Brothers vs. Union of India reported in 1995(2) S.C.C. 302, wherein the Apex Court has held -9- that when the owner himself has purchased the land under a acquisition, the same would form the basis for determining the market value of compensation to the claimants. 9. Considering the said Judgments of the Apex Court, it is evident that the best evidence for determining the compensation would be the Sale Deed in respect of the same land which was the subject matter of acquisition. Considering that Appellant has failed to produce any other sale instance in the proximity of the Notification under Section 4 of the Act, we find that the best evidence for determining the market value on the date of Section 4 Notification, would be the transaction whereby the Appellant himself has purchased the land acquired. 10. The sale instances produced by the Respondents as such are not relevant for the purpose of determining the market value of land in the present acquisition proceedings considering that the Appellant has relied upon the sale instance of the land which was the subject matter of the present acquisition. As such, the documents produced by the Appellant before this Court in respect of the land acquired would be relevant for determining the market value of the land as on the date of Section 4 Notification. 11. On perusal of the Agreement produced by the Appellant which is dated 21st May, 1976, we find that the Appellant had agreed to purchase the land which was subject matter of the acquisition at the rate of Rs.5.50 per square metre. Pursuant to the said Agreement as stipulated therein, the peaceful possession of the said property was delivered to the Appellant. The said Agreement is duly -10- registered before the Sub-Registrar of Salcete. In terms of the said Agreement, the Sale Deeds in respect of the land acquired were duly executed by the original vendors in favour of the Appellant herein. The genuineness of the said documents has not been disputed by the Respondents. As observed above, the Respondent themselves in their cross examination have brought on record the existence of the said documents. As such, we find that on the basis of the price fixed in the said Agreement, after giving necessary escalation, the market value of the land acquired can be fixed as on the date of Section 4 Notification. The Apex Court in the case of ONGC Ltd. v. Rameshbhai Jivanbhai Patel, reported in 2008 (14) S.C.C. 745, has held at paras 13 and 14 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 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 -11- 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 prices, then the increase to be applied would depend upon the same. “ 12. The Agreement admittedly was executed in May 1976 and the Notification in the present case was issued somewhere in November 1980, which is nearly five years from the date of the said Agreement. Aw. 1 in his evidence has deposed that the land acquired which was situated at Davorlim Village, was at a distance of 500 metres from the eastern boundary of Margao City. He has deposed that from the year 1978 onwards, the price of land in Margao and around, went up tremendously. From 1978, the price rose by five to six times. From 1980 to 1981, the increase was to the extent of 50 percent per annum. He has also deposed that the land of the Appellant was acquired for construction of houses. Considering that the land acquired was situated in the outskirts of Margao, which is a commercial city of the State of Goa, we find that the land had good potentiality for development purposes. In fact, the Appellant has produced the Sanad issued by the Collector -12- which is at exhibit 49 and the same is dated 30th July, 1980, which is much prior to the Section 4 Notification in the present case. Apart from that Housing Board was already existing in view of the notification issued on 17th July, 1976, at the time of the Section 4 Notification in the present case. As such, on the overall evidence on record, we find that the land acquired had potentialities of being used for development purposes. 13. Considering that the price in the year 1976 was Rs.5.50 per square metre, we find that the reasonable escalation in the present case would be 15 percent per annum on cumulative basis in view of the location of the acquired land being in the outskirts of Margao City and the existing Housing Board and the Sanad for conversion of the said land was already obtained at the time of Section 4 Notification. These factors have a bearing on the escalation of the price of land. The market value as such works out to Rs.11.15 per square metre which is rounded up to Rs.11/- per square metre. Even in the Sale Deed at exhibit Rw. 1/A dated 18th April, 1978, produced by the Respondents, the developed land was purchased in 1978 at Rs.9/- per square metre and undeveloped land at the rate of Rs.5.50 per square metre. In the present case, the land acquired was in the process of being developed. Considering the price therein, we find that the price of Rs.11/- fixed for the land acquired is fair and reasonable. The Reference Court considering that the value of the trees is to be added to the value of the land and held that the market value of the land fixed by the Land Acquisition Officer works out to Rs.7/- per square metre. As such, the Appellant would be entitled for an excess amount of Rs.4/- per square metre. We, accordingly, hold that the Appellant is entitled for excess compensation at the rate of Rs.4/- per square metre for the -13- land acquired. The point for determination is answered accordingly. 14. In view of the above, we pass the following : ORDER (i) The Appeal is partly allowed. (ii) The Appellant is entitled for an excess amount of Rs.4/- per square metre for the land acquired along with all the statutory benefits in accordance with law. (iii) The Reference Court is directed to calculate the amount payable by the Respondents to the Appellant in accordance with the determination of the market value as stated hereinabove, within three months of receipt of this Order. (iv) The Respondents are directed to deposit such excess amount within two months from the date of such determination by the Reference Court. (v) The Appeal stands disposed of accordingly with no orders as to costs. A. S. OKA, J. F. M. REIS, J. arp/*