IN THE HIGH COURT OF JUDICATURE AT PATNA FA No. 135 of 1995 THE STATE OF BIHAR VERSUS AYODHYA MAHTO WITH FA No.136 of 1995 THE STATE OF BIHAR VERSUS BALMIKI MAHTO WITH FA No.137 of 1995 THE STATE OF BIHAR VERSUS MUSAFIR MAHTO WITH FA No.138 of 1995 THE STATE OF BIHAR VERSUS RAMA NAND MAHTO WITH FA No.140 of 1995 THE STATE OF BIHAR VERSUS RAJ MAHTO WITH FA No.141 of 1995 THE STATE OF BIHAR VERSUS DEEP NARAYAN THAKUR WITH FA No.142 of 1995 THE STATE OF BIHAR VERSUS SMT. SITALI DEVI WITH FA No.143 of 1995 THE STATE OF BIHAR VERSUS SMT. RAJ KUMARI DEVI WITH 2 FA No.144 of 1995 THE STATE OF BIHAR VERSUS RAJESHWAR YADAV WITH FA No.145 of 1995 THE STATE OF BIHAR VERSUS BIDYA PD. WITH FA No.146 of 1995 THE STATE OF BIHAR VERSUS DWARIKA MAHTO WITH FA No.151 of 1995 THE STATE OF BIHAR VERSUS SADHU SHARAN RAI WITH FA No.156 of 1995 THE STATE OF BIHAR VERSUS BHOLA CHOUDHARY WITH FA No.157 of 1995 THE STATE OF BIHAR VERSUS NIHALI MAHTO WITH FA No.158 of 1995 THE STATE OF BIHAR VERSUS SMT. BASMATI DEVI WITH FA No.159 of 1995 THE STATE OF BIHAR VERSUS BRAHKU MAHTO WITH FA No.160 of 1995 THE STATE OF BIHAR VERSUS 3 MOSTT. SAVITRI DEVI ---------- For the appellants: Mr. P. Tekriwal, G.A.-I Mr. Anil Kr. Jha, G.A-II, Mr. Sanjay Kr. No. 1, G.P.-XIV. For the respondents: Mrs. Veena Rani Prasad, Advocate. Mr. Vishal Saurabh, Advocate -------- PRESENT : THE HON’BLE THE CHIEF JUSTICE J U D G M E N T (30.04.2010) Dipak Misra, C.J.- In this batch of appeals preferred under Section 54 of the Land Acquisition Act, 1894, (for short `the Act‟), the assail is to the award dated 15.12.1994 passed in Land Acquisition Case No. 4/92 by the Special Land Acquisition Judge-III, Patna, (hereinafter referred to as `the reference court‟). 2. The facts which are essential to be stated at that notifications were issued for the purpose of acquisition of land admeasuring 13.375 acres of land situate in Village Pahari, P.S.-Patna City Thana No. 14, Distt. Patna belonging to various land owners for construction and establishment of Ganga Pollution Plant. The matters were taken up by the Land Acquisition Officer, who eventually 4 passed the award on 15.12.1994 awarding a sum of Rs. 15,000/- per kathha. 3. Being dissatisfied with the said award, the land owners-claimants filed an application under Section 18 of the Industrial Disputes Act, 1994 (hereinafter referred to as `the Act‟) for reference of the same to the Civil Court and, accordingly, the cases were referred and eventually have been adjudicated by the reference court. 4. Before the reference court, it was contended that the valuation of the land would be Rs. 50,000/- per kathha, and the amount awarded by the Land Acquisition Collector is grossly low, being Rs.7,857/- per kathha i.e. Rs.2,51,428/- per acre. 5. It was put forth before the reference court that the Collector had not considered the rates mentioned in the sale deeds which were pressed into service while claiming the compensation; that he had relied upon the sale deeds dated 20.12.1988 and illegally discarded the sale deeds which were in proximity of time to the issue of notification; that the situation of the land has been totally ignored by the Land Acquisition Officer. 5 6. The claimants in order to prove their cases adduced oral evidence as well as tendered certain sale deeds in evidence. The reference court upon perusal of the oral evidence and the sale deeds which were contemporaneous in nature came to hold that the valuation of the land per kathha would be Rs. 7,857/- and, accordingly, determined the compensation. 7. I have heard Mr. P.Tekriwal, learned Government Advocate-I, Mr. Anil Kumar Jha, learned Government Advocate-II and Mr. Sanjay Kumar No.1, learned Government Pleader-XIV for the appellants and Mrs. Veena Rani Prasad, learned counsel for the respondents. 8. Before I proceed to deal with the rivalised contentions raised at the Bar, I think it apt to refer to certain pronouncements which ought to be kept in mind while dealing with a case for grant of compensation pertaining to acquisition of land. 9. In Ahmedabad Municipal Corporation and others Vs. Shardaben and others, (1996) 8 SCC 93 the Apex Court expressed the view that burden is always 6 on the claimants to prove by adducing reliable evidence that the compensation offered by the Land Acquisition officer is inadequate and the lands are capable of fetching higher market value. It is the duty of the court to closely scrutinize the evidence, apply the test of a prudent and willing purchaser, i.e., whether he would be willing to purchase in open and normal market conditions of the acquired land and then to determine the just and adequate compensation. 10. In Hookiyar Singh and others Vs. Special Land Acquisition Officer, Moradabad and another, (1996) 3 SCC 766 their Lordships expressed the view that the Court must not indulge in feats of imagination but, sit in the armchair of a prudent purchaser and put a question to itself whether as a prudent purchaser it would offer the same price in the open market as is to be determined. 11. In State of U.P. and others Vs. Ram Kumari Devi (Smt.) and others, (1996) 8 SCC 577 the Supreme Court ruled that when 13.75 acres of land was offered for sale in an open market, no prudent man would have credulity to purchase the land on square foot basis. 7 Similar view was taken in the case of Gujarat Industrial Development Corporation Vs. Narrottambhai Morarbhai and another, (1996) 11 SCC 159. 12. Yet in another decision rendered in the case of G. Narayan Vs. Land Acquisition Officer, (1996) 10 SCC 607 it was ruled that it must be established, as a fact, that the potential purpose does exist on the date of notification, the prevailing conditions in the market, the existence of the construction of building activities in the neighbourhood and that other lands in the adjacent neighbourhood possessed similar conditions. 13. In Kanwar Singh and others Vs. Union of India, (1998) 8 SCC 136 it has been expressed that the amount of compensation for the land acquired depends on the market value of the land on the date immediately before the notification under Section 4 of the Act or when same land is acquired and offer of compensation is made through an award. In the aforesaid case it was ruled that the consideration in terms of price received for land under bonafide transactions on the date or preceding the date of notification issued under Section 4 of the Act generally 8 shows the market value of the acquired land and the market value of the acquired land is to be assessed in terms of those transactions. For attracting the conception of future potentiality of the land, location of the land cannot be ignored as has been held in the case of Hasan Ali Walimchand (dead) by LRs Vs. State of Maharashtra, (1998) 2 SCC 388. 14. In this context I may refer with profit to the decision rendered in the case of Land Acquisition Officer Revenue Divisional Officer, Chitor Vs. L. Kamalamma (Smt.) dead by LRs and others K. Krishnamachari and others, (1998) 2 SCC 385 wherein it has been held that when no sales of comparable land are available where large chunks of land had been sold, even land transaction in respect of smaller extent of land could be taken note of as indicating the price that it may fetch in respect of large tracts of land by making appropriate deductions such as for development of the land by providing enough space for roads, sewage, drains, expenses involved in formation of a layout, lump sum payment as also the waiting period required for selling the sites. 9 15. In Kasturi and others Vs. State of Haryana, (2003) 1 SCC 354 it has been opined that there is a difference between a developed area and an area having potential value, which is yet to be developed and 20% deduction towards development charge as against the normal 1/3rd from the amount of compensation would be regarded as justified. 16. In the case of Ahad Brothers Vs. State of M.P. and another, (2005) 1 SCC 545 the Apex Court has expressed the view as under: - “13. The Reference Court as well as the High Court both have concurrently held that the land acquired, though was an agricultural land, was not being used for agricultural purpose as on the date of issuing Section 4 (1) notification and it had potentialities for the purpose of creating building sites. The Reference Court was right in determining the market value of the land acquired @ Rs.2/- per sq. ft. but it committed an error in not giving any deduction towards developmental charges. In our view, having regard to the location and surroundings of the acquired land, as already indicated above, it would be just and appropriate to deduct 30% towards 10 developmental charges out of the amount of compensation payable to the appellant @ Rs.2/ per sq. ft. 14. In view of what is stated above, the impugned judgment and order cannot be sustained. The impugned judgment is modified awarding the compensation to the appellant as owner of the land acquired @ Rs.2/ per sq. ft. after deducting 30% of the market value of the land calculated on the basis of Rs.2/ per sq. ft. The appellant is also entitled to all the statutory benefits on the amount of compensation so determined. The appeal is disposed of accordingly. No costs.” 17. Recently in Sharadamma Vs. Special Land Acquisition Officer and another, 2007 AIR SCW 1109 a two-judge bench of the Apex Court taking note of the fact that the acquired land was surrounded by factories and there was industrial potentiality and the land acquired was adjoining the national highway and better located fixed the compensation at the rate of Rs.20/- per square yard. 18. In Land Acquisition Officer A.P. Vs. Kamandana Ramakrishna Rao and another, 2007 AIR SCW 1745 the Apex Court while dealing with the issue of 11 compensation determined on yield basis observed that the Court is not precluded from taking into consideration factors such as potentiality and utility of land. 19. In this batch of cases, as is evident, the Land Acquisition Collector has awarded Rs. 7,857/- per kathha regard being had to the situation of the lands. It is submitted by the learned counsel for the respondents that the situation of the lands is in total proximity and, therefore, the distinction made by the Deputy Collector Land Reforms is absolutely incorrect. It is canvassed by the learned counsel for the respondent with immense vehemence that the reference court has rightly fixed the quantum at Rs. 15,000/- after adverting to the factual scenario in entirety and has awarded the compensation keeping in view the concept of parity. 20. Be it noted, some of the claimants have filed cross-objections for enhancement of compensation. The question that arises for consideration whether the amount of compensation awarded by the reference court is inadequate in the obtaining factual scenario or there should be revision on the basis of the appeal preferred by 12 the State or enhancement of the award amount on the basis of cross appeal filed by the respondents. 21. To appreciate the same, I have bestowed my anxious consideration and perused the award passed by the reference court and the evidence brought on record. On a scrutiny of the materials on record it is manifest that the claimants had examined a number of witnesses. Certain sale deeds of the year 1988 have been exhibited. The witnesses have deposed with regard to the situation of the land, the potential utility, rising trend of price, the effect of economic concept in view and it has been brought in evidence that the lands are situate south of the Bye-pass Road and to the East Gauri Chak road and are fit for construction of building. In the year 1988, the land per kathha was sold at a very high price. He has referred to Exhibit-1 whereby three kathhas of lands were sold for Rs.75,000/- i.e. one kathha of land was sold for Rs. 25,000/-. The sale deed is dated 3.5.1989. Vide Ext.1/A it has been demonstrated that the land has been sold for Rs.20,000/- per kathha. 22. The learned counsel appearing for the State 13 submitted that the reference court has erred in law by placing reliance on the sale deeds pertaining to small tract of land. Ordinarily, the said submission would have been weighed with me but it is noticeable that the District Land Acquisition Officer has also evaluated the land according to kathha basis. That apart, on behalf of the State, certain valuation khatiyans (Exhibits `A‟, „B‟ and „D‟) have been brought on record. Exhibit `A‟ is the sale report, Ext. „B‟ is the sale statement and Ext. „D‟ is the valuation khatian and specially the sale statement of sale deed dated 20.12.88 in respect of S.P. No. 1375, placing reliance whereupon the District Land Acquisition Officer has fixed the valuation at the rate of Rs.3,857/- per kattha. Thus, if the documents containing the sale deeds, Exhibits 1 series and Ext.2, the survey map, which have been brought on record and the potential market value and rising trend of the price of the land for vicinity of the acquired land at the relevant period, the average valuation is taken into consideration, it would come to Rs. 16,000/- per kathha. However, the learned reference court keeping in view a uniform facet has determined the price of the land at Rs. 14 15,000/- per kathha. 23. The learned counsel appearing for the respondents in support of the cross-objections has submitted that the reference court should have awarded Rs. 25,000/- per kathha regard being had that he has arrived at that figure on the foundation as mentioned above. The aforesaid submission at first blush appears to be attractive, but on a deeper scrutiny, it appears that the learned reference judge has taken into consideration the totality of the facts and circumstances of the case and applying the doctrine of average has fixed the amount of Rs. 15,000/-. Hence, there is no error in the said determination. 24. In the result, the appeals filed by the State as well as the cross-objections are dismissed without any order as to costs. Patna High Court. The 30th April, 2010. NAFR Pawan/- ( Dipak Misra, C.J. )