1 IN THE HIGH COURT OF BOMBAY AT GOA FIRST APPEAL NOS. 94 AND 109 OF 1999 FIRST APPEAL NO. 94 OF 1999 1. State of Goa, Represented by Special Land Acquisition Officer(SIP), Irrigation Department, Gogol, Margao-Goa. 2. Executive Engineer, Works Division IX, Irrrigation Department, Gogol, Margao-Goa. ... Appellants versus 1. Shri Alvaro Mousinho A. de Noronha Ferreira. 2. Shri Antonio Rui Diogenes de Noronha Ferreira (Represented by Power of Attorney Applicant No.1 Shri Alvaro Mousinho A. de Noronha Ferreira) Resident of La Campala Residential Colony, Miramar, Goa. ... Respondents Mr. S. Vahidulla, Additional Government Advocate for the Appellants. Mr. M. B. Da Costa, Senior Advocate with Mr. J. A. Lobo, Advocate for the Respondents. 2 FIRST APPEAL NO. 109 OF 1999 1. Alvaro de Noronha Ferreira, retired District Judge, of full age, residing at La Campala Colony, Miramar, Panaji. 2. Antonio Rui Diogenes de Noronha Ferreira through his attorney the Appellant No.1, La Campala Colony, Miramar, Panaji, Goa. ... Appellants versus 1. Special Land Acquisition Officer(SIP) Gogol, Margao, Goa. 2. The Executive Engineer Works Division IX, Irrigation Department Gogol, Margao, Goa. ... Respondents Mr. M. B. Da Costa, Senior Advocate with Mr. J. A. Lobo, Advocate for the Appellants. Mr. S. Vahidulla, Additional Government Advocate for the Respondents. CORAM : N. A. BRITTO, J. DATE : 10TH JUNE, 2008 AND 12TH JUNE, 2008. 3 ORAL JUDGMENT Dissatisfied with the Judgment/Award dated 23-6-1999 of the learned Reference Court enhancing the compensation payable, both the parties to the reference have preferred these appeals. 2. The parties hereto shall be referred to in the names as they appear in the cause title of the reference case. 3. Applicants' property known as “Decimo Nono Lanco de Gogola” situated at Gogola ward within the limits of Margao Municipal Council has been the subject matter of several acquisitions. In the year 1964 a part of it was acquired for the construction of Government Multi Purpose High School. Later in the year 1975 it was acquired for the eastern bypass of the National Highway and the amount awarded to the applicants by the L.A.O. was enhanced from Rs.15/- to Rs.40/- per sq. meter. 4. By Notification dated 7-2-1991 issued under Section 4(1) of the Land Acquisition Act, the Government acquired adjoining the said eastern bypass a strip of 10 meters width and having an area of 1687 sq. meters from Chalta Nos. 4, 5 and 9 of P.T. Sheet No.92 and Chalta No.5 of P.T. Sheet No.93 for the purpose of construction of distributory D-2 main canal of Salaulim Irrigation Project, and different rates were awarded for different Chalta numbers by Award dated 23-6-1995. No compensation was awarded for 40 sq. meters of the nullah. 4 By the impugned Judgment/Award dated 23-6-1999 the learned Reference Court was pleased to enhance the compensation payable at the flat rate of Rs.200/- per sq. meter. 5. Atlas Realtors of which Jose Almeida/AW3 is the partner had developed their property in ward Murda, now generally referred to as Fatorda, in the year 1976 or thereabout and they had sold different plots at different rates and at different times. A plot was sold in the year 1981 at the rate of Rs.90/- per sq. meter. Another plot was sold by Deed dated 11-5-1982 at the rate of Rs.165/- per sq. meter. Another plot was sold by Deed dated 8-7-1983 at the rate of Rs.250/- per sq. meter. The sale deeds of the aforesaid three plots were kept in mind, and not necessarily relied upon, by the learned Reference Court at the time of fixing compensation for the land admeasuring 12,250 plus 160 sq. meters of the property of Faleiros which was subject matter of reference in Land Acquisition Cases Nos.7, 8 and 9 of 1985 wherein compensation which was awarded at the rate of Rs.60/- per sq. meter was enhanced to Rs.200/- per sq. meter. The said Atlas Realtors also sold plots by Deeds dated 25-10-1984 at the rate of Rs.300/- per sq. meter(Exh.AW1/F) and by Deed dated 16-6-1986 at the rate of Rs.330/- per sq. meter(Exh.AW1/G) on which reliance has been placed by the applicants. 6. The applicants subsequently vide Agreement dated 17-1-1997(Exh.AW1/E) sold about 4803 sq. meters of Chalta No.18 of P. T. Sheet No.118 on the other side of the said bypass road for a sum of 5 Rs.1,800 per sq. meter. 7. The learned Reference Court has come to the conclusion that the drain admeasuring 40 sq. meters for which no compensation was awarded was part and parcel of the property of the applicants and not a nullah belonging to the Government. There is no challenge to this finding. Similarly, the learned Reference Court also came to the conclusion that there was no tenant in the property of the applicants, particularly in relation to Chalta No. 5/93 and the entire compensation awarded including a part of it which is lying with the L.A.O. ought to be paid to the applicants. There is no challenge to this finding as well. A faint attempt was made by the learned Additional Government Advocate contending that the applicants property did not fall in the settlement zone. The applicants had examined Rosario Gomes/AW2 who had produced the Outline Development Plan of Margao Municipal area and who had clearly stated that as per the old plan which was followed from 1988 to 1997 the acquired land was located in a settlement zone. In this regard the learned Reference Court observed that Rosario Gomes/AW2 had clarified that in the old Outline Development Plan this area was not marked for recreation since the canal was to pass which clearly meant in the year of acquisition the property of the applicants did not fall in the recreation zone and therefore the version of RW1/Assistant Engineer of Irrigation Department that the acquired land came in recreation zone was only under the new plan and not under the old plan. 6 8. The applicants claimed enhanced compensation at the rate of Rs.500/- per sq. meter and before the Reference Court relied upon the said Agreement dated 17-1-1997, which in the opinion of the learned Reference Court, could not be taken into consideration and, in my view rightly, as it was entered into, six years after the date of acquisition. 9. The applicants also relied upon the said Award dated 28-11-1988(Exh.AW1/I) in the case of Advocate Caitano Faleiro and examined him in support of the same. The applicants also relied upon the said two sale deeds dated 25-10-1984(Exh.AW1/F) and 16-6-1986(Exh.AW1/G) by which developed plots were sold at the rate of Rs.300/- and Rs.330/- respectively and in support of the same examined Jose Almeida/AW3 who is one of the partners of the said Atlas Realtors. 10. The applicants had also examined AW5/Engineer Moniz, an approved valuer, who valued the acquired land at the rate of Rs.490/- per sq. meter based on the said two sale deeds and one Award, the sale deeds pertaining to land sold by the said Atlas Realtors. However, the learned Reference Court noted, and in my view, rightly, that his report of valuation was dated 6-8-1998 i.e. after about 7 years from the date of the Notification dated 7-2-1991. The learned Reference Court in rejecting the report also noted that Shri Moniz/AW5 had relied upon sale deeds which were of fully developed plots whereas the acquired land was undeveloped and he had also relied upon the Agreement dated 17-1-1997 which 7 was much later from the date of the Notification under Section 4 of the Act and he had not given any calculations as to how he had arrived at the rate of Rs.490/- per sq. meter and therefore the market value could not be fixed by taking the said valuation report as the basis. A report which gives no reason in support thereof needs only to be rejected. 11. Admittedly, the acquired land was situated on the left side of the Margao-Curtorim road within the limits of Margao Municipal Council. Likewise Faleiro's land which was subject matter of Award dated 28/11/1988/Exh. AW1/I was also situated on the right side of the said Margao-Curtorim road. The applicants acquired land was also touching the said eastern bypass of the National Highway. As stated by Ferreira/AW1 it was situated in ward Gogola and it was included in Margao Outline Development Plan within the municipal limits of Margao city as a settlement or residential zone. He had stated that all the plots acquired were parts of the same property and it was situated in a highly developed area. He had stated that there existed hundreds of houses, shops, super markets, private hospitals as also the Multi Purpose High School and the distance between the said Multi Purpose High School and the acquired strip was about 330 meters. He has stated that on the eastern side of their property, just across the road, lies the Chowgule College and to the south of the acquired land just across the Margao- Curtorim road, there are two multi storage buildings, the land of which was declared as central commercial area and one of the said two buildings was already built at the time of acquisition and the other was built three or four years 8 before his deposition. He had further stated that their whole property was bounded on the west by the said bypass, on the south by Margao-Curtorim road, on the east by the Municipal road and on the north by the same Municipal road separating their property from Chowgule College complex and another private property of one Carlos Dias. He has stated that their property lies about 2 ½ kms. from the Municipal Council building of Margao, 1 ½ kms. from the Holy Cross Church at Margao and at about 1 ½ kms. from the road Margao to Ponda via Raia. He had further stated that the L.A.O. had no justification for fixing different rates for the different plots when all the acquired plots were parts of the same property and were all abutting the said eastern highway. He has further stated that the land subject matter of Agreement dated 17-1-1997 lying on the eastern side of the bypass was similar to the acquired land and the Agreement dated 17-1-1997 was registered on the same day and the prospective purchaser had given an advance of Rs.4,50,000/-. According to AW1/Ferreira, Faleiro's property was situated just across the Margao-Curtorim road and the acquired part was in the interior and it was acquired for the purpose of the building of offices and residences of the Irrigation Department and it had no motorable access but only a footpath and the Department subsequently acquired a strip of the same property to make road giving access to Margao-Curtorim road to the said buildings. According to AW1/Ferreira their property was having much more value than the land acquired of Faleiro's property. He had further stated that the award of Faleiro's property was not challenged by the Government and the amount was paid. He had further stated that their land was more suitable for construction and it was abutting the highway 9 though it was 1 ½ to 2 meters below the level of the highway but there was no need of any filling since the adjoining land was still at a lower level. With reference to the land sold pursuant to the Agreement dated 17-1-1997 Ferreira/AW1 stated that Alcon Constructions have developed a colony where they have constructed a hospital, several houses and two buildings containing flats. Ferreira/AW1 further stated that before the L.A.O. they had not asked for severance charges though the whole frontage of their property along the highway was acquired in the present case and they had not put this claim because the then Chief Engineer of Irrigation Department had informed him that in order to reduce the inconvenience of the acquisition, he would construct two culverts and for that reason they had not raised the point of severance but the same Chief Engineer retired subsequently and the Department dug the canal but did not construct a single culvert on the entire land about 120 meters and as such their property does not have access to the said eastern bypass. Placing emphasis on the award of Faleiro's, AW1/Ferreira stated that it was their claim that if the land of Faleiro which was landlocked was worth Rs.200/- per sq. meter in the year 1984 then their land ought to be worth much more in the year 1991. He further stated that in the year 1989 and 1990 he was offered Rs.700/- per sq. meter of the said land which he did not accept but he could not rely on the said offer as he had no documents to substantiate the same. In cross-examination he stated that what was acquired for the eastern bypass in the year 1975 was a strip of 40 meters width and Rs.15/- awarded by the L.A.O. was subsequently enhanced by the District Court to Rs.40/- per sq. meter and since he had claimed only Rs.40/- he did not seek 10 increase in the reference at a higher rate. He denied the suggestion that the acquired land had ups and downs and was required to be filled. He admitted that in between the Multi Purpose High School and the eastern bypass there is a road which goes to St. Ann's School and further, from Margao-Curtorim road and the distance between Multi Purpose High School and the said road going to St. Ann's School will be about 150 meters and from there to the eastern bypass road the distance will be another 150 meters. With reference to the plots of sale deeds dated 25-10-1984(Exh.AW1/F) and 16-6-1986(Exh. AW1/G), he stated that the said plots were at a distance of 600 to 900 meters away from the acquired land. He admitted that the said plots were of a sub-divided property. 12. The learned Reference Court did make an attempt to determine the market value of the acquired land with reference to the sale deed dated 16-6-1986(Exh.AW1/G) and after taking certain deductions arrived at a value of undeveloped land at the rate of Rs.255/- per sq. meter but abandoned the same half way. At the same time, the learned reference Court referred to the acquisition of 1975 when applicants property was acquired for the eastern bypass and after giving appreciation of 10% fixed the market value of the acquired land to Rs.104/- per sq. meter but this method was again abandoned half way. Both the methods were abandoned half way without taking to their logical conclusion. The learned Reference Court then concluded thus: “Considering the situation of the acquired land, the availability of the 11 amenities, proximity to the well developed surrounding area, the sale deed exbt. AW1/G, due reductions in the price of that sale deed plot to bring it at par with the acquired land, the award of Rs.40/- per sq. mt. for acquisition of the land from same property in 1975, and all other factors, I am of the view that a flat rate of Rs.200/- per sq. mt. should be the true market value of the acquired land as on 7-2-1991. Hence, the issue no.1 is answered accordingly by fixing the market value at Rs.200/- per sq. mt.”. 13. The learned trial Court discarded the Award dated 28-11-1988(Exh.AW1/I) of Faleiro's property stating that the said award was made relying on two sale deeds, one of which was a sale deed dated 8-7-1983 and the other 11-5-1982 and since the vendors nor the vendees of the sale deed were examined it would not be proper to rely on the said award for the purpose of determining the market value of the acquired land. This approach of the learned Reference Court has got to be considered as wholly erroneous. Whatever might have been the method used by the learned Reference Court in Faleiro's case, once the market value was determined and paid by the Government that ought to have been considered as the market value of the acquired land of Faleiro's property. Admittedly, the award in the case of acquisition of the eastern bypass made in the year 1975 or thereabout was not relied upon either by the L.A.O, the Applicants nor the Respondents. There is no doubt that if evidence or admission on behalf of the claimants is available as regards market value commanded by the acquired land itself there is no need to travel beyond the boundary of the acquired land. In 12 the case of Shakuntalabai(Smt) and others v. State of Maharashtra((1996) 2 SCC 152) the Apex Court observed that the need to take into consideration the value of the lands adjacent to the acquired land or near about area which possessed same potentiality to work out the prices fetched therein for determination of the market value of the acquired land would arise only when there is no evidence of the value of the acquired land. In a case where the evidence of the value of the acquired land itself was available on record, it was unnecessary to travel beyond that evidence and consider the market value prevailing in the adjacent land. That was a case where the property was purchased in the year 1957 and the acquisition took place on 11-8-1965 i.e. to say after a gap of about 7 to 8 years. However, in the case at hand, we find that the acquisition for the bypass was in the year 1975 while the present acquisition was in the year 1991 and the gap between the two was too wide and much development, had taken place thereafter. The Land Acquisition Officer himself had not used the said award for the purpose of fixing the market value. The Respondents too had not relied upon the same nor had they made a submission at any time that compensation ought to be fixed on the basis of the same. Considering all these factors the learned Reference Court would not have been justified in attempting to fix the market value based on the said award. 14. The learned Reference Court could have relied on the sale deed dated 16-6-1986(Exh.AW1/G) and could have fixed the market value of the acquired land but that was an effort made but abandoned half way. Likewise, the 13 learned Reference Court could have also assessed the market value of the land based on award(Exh.AW1/I) pertaining to Faleiro's property. 15. Learned Senior Counsel on behalf of the applicants submits that the market value of the acquired land could be determined either by using the sale deed dated 16-6-1986(Exh.AW1/G) or the Award dated 28-11-1988(Exh.AW1/I) of Faleiro's property and in any case the market value so determined will have to be worked out at least at Rs.462/- per sq. meter. Learned Senior Counsel submits that if the sale deed dated 16-6-1986 is taken into consideration a deduction of 20% only and not 33½% would be required to be taken towards development charges. Learned Senior Counsel submits that the deduction taken of 20% plus 33½% made by the Reference Court was wholly unwarranted and by taking a deduction of 20% only the price of the acquired land can be fixed at Rs.462/- per sq. meter and in this context learned Senior Counsel has placed reliance on Kasturi and others v.State of Haryana((2003) 1 SCC 354) and Deputy Director, Land Acquisition v. Malla Atchinaidu and others((2006) 12 SCC 87). Learned Senior Counsel has also submitted that by the acquisition of the strip of 10 meters width the entire frontage to the highway has been lost to the applicants and on that count the compensation to be determined should be enhanced by another 5% at least. Learned Senior Counsel further submits that the acquired land had many plus factors as it was touching the Margao-Curtorim road and all along the eastern bypass and the acquired land is a small plot, the total area which comes to 1687 sq. meters. Learned Senior Counsel has also submitted that 14 considering that the acquired land was in a highly developed area where there are houses, shops, super markets, etc. appreciation ought to have been awarded at the rate of 15% every year considering that the sale price obtained by sale deed dated 16-8-1986 was five years prior to the present acquisition. Learned Senior Counsel further submits that in case Faleiro's property is taken into consideration then the compensation ought to be more than what was awarded to the Faleiro's property by the District Court considering that the Faleiro's property was landlocked and the Irrigation Department had to acquire separately the land for access and more over it was a large tract of land admeasuring 1241 sq. meters. It is the contention of learned Senior Counsel that either way, the rate of the acquired land by taking into account all circumstances would exceed 500 sq. meters. 16. While determining the compensation payable the Court is required to take into consideration, inter alia, its main component i.e. its market value not only with reference to its actual use but also to the better use which it may be put in the immediate or near future which is known as its potentiality. When the acquired land has the potentiality for being used for building purpose in the immediate or near future that is regarded as its building potentiality.(See P. Ram Reddy v. Land Acquisition Officer((1995) 2 SCC 305). This principle was recognized way back in Vyricheda N. Gajapatiraju v. RDO(AIR 1939 PC 98) when it was stated by the Privy Council that land is not to be valued merely by reference to the use to which it was being put but also by reference to the use it is being reasonably capable being put in future. 15 17. Although there are different methods for arriving at the market value of the acquired land, it is now well settled that comparable sales method of valuation of land is preferred to other methods of valuation, because it furnishes the evidence of the market value of the acquired land which a willing purchaser would pay if it had been sold in the open market at the time of Notification under Section 4 of the Act, but before that is done, there are certain factors which are required to be complied with and these factors are that the sale must be a genuine transaction, the sale deed must have been executed at the time proximate to the date of the said Notification, the land covered by the sale must be in the vicinity of the acquired land and must also be similar and comparable and if these factors are satisfied, there is no reason why the sale value of the land covered by sales be not given for the acquired land and in case there are dissimilarities as regards location, shape, size, nature of land, etc. it is open to the Court to proportionately reduce compensation depending upon the disadvantages attached to it. In doing so, some guess work is always permissible but what is impermissible are feats of imagination and misplaced sympathies. There should not be unjust enrichment to the Government nor there should be undue deprivation to the owner of the land. What is true in case of sale deeds must also be true in cases of awards passed by the Courts.(See ONGC Ltd. v. Senhabhai V. Patel and others(2005(6) SCC 454). 18. As far as the deductions are concerned there cannot be any strait jacket formula and the same varies depending upon the nature of the land, its 16 situation and the stage of development, etc. In the case of Brig. Sahib Singh Kalha v. Amritsar Improvement Trust(AIR 1982 SC 940) to which reference was made by the learned Reference Court, the deduction taken for development was 53%. Reference to this case is made in the case of Kasturi and others v. State of Haryana(supra). The normal deduction towards development is one third as stated in para 17 of Kasturi and others v. State of Haryana(supra) on which reliance is placed by