-1- IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION FIRST APPEAL NO. 896 OF 2005 IN L.A.R . NO. 88 OF 1998 1. The State of Maharashtra ) 2. The Special Land Acquisition Officer ) Irrigation No.1, Nashik. ) 3. The Executive Engineer ) Karanjwan Project, Trimbak Road, Nashik )..Appellants versus Yashwant Kahnu Shirsath ) Adult, Occ. Agriculture ) R/o Kavanai, Tal. Igatpuri, Dist. Nashik. )..Respondent. Mr. K.K. Tated, Assistant Government Pleader, for the appellants. Mr. P.B. Shah for the respondent. WITH FIRST APPEAL NO. 940 OF 2005 IN L.A.R . NO. 528 OF 1997 1. The State of Maharashtra ) 2. The Special Land Acquisition Officer ) Irrigation No.1, Nashik. ) 3. The Executive Engineer ) Karanjwan Project, Trimbak Road, Nashik )..Appellants versus -2- Bhausaheb Shankar Shirsath ) substituted as under: ) 1. Bhausaheb Shankar Shirsath ) 2. Chhaba Baburao Shirsath ) 3. Lahanubai Baburao Shirsath ) 4. Fulyabai Waman Govardhane ) S. No.1 GPA of S. Nos. 2 to 4 ) All adults, r/o Kavanai, Tal. Igatpuri, ) Dist.Nashik )...Respondent. with FIRST APPEAL NOS. 897, 898, 899, 900, 901, 902, 903, 904, 905, 906, 907, 908, 909, 910, 911, 912, 913, 914, 915, 916, 917, 918, 919, 920, 921, 922, 923, 924, 925, 926, 927, 928, 929, 930, 931, 932, 933, 934, 935, 936, 937, 938, 939, 941, 942, 943, 944, 945, 946, 947, 948, 949, 950, 951, 952, 953, 954, 955, 956, 957, 958, 959, 960, 961, 962, 963, 964, 965, 966, 967, 968, 969, 970, 971, 972, 973, 974, 975, 976, 977, 978, 979, 980, 981, 982, 983, 984, 985, 986, 987, 988, 989, 990, 991, 992, 993,994, 995, 996, 997, 998, 999, 1000, 1001, 1002, 1003, 1004, 1005, 1006, 1007, 1008, 1009, 1010, 1011, 1012, 1013, 1014, 1015, 1016, 1017, 1018, 1019, 1020, 1021, 1022, 1023, 1024, 1025, 1026, 1027, 1028, 1029, 1030, 1031, 1032, 1033, 1034, 1035, 1036, 1037, 1038, 1039, 1040, 1041, 1042, 1043, 1044, 1045, 1046, 1047, 1048, 1049, 1050, 1051, 1052, 1053 AND 1747 OF 2005 with Cross Objection (Stamp) No. 13417 of 2007 in F.A. No. 897 of 2005. with Cross Objection (Stamp) No. 13721 of 2007 in F.A. No. 940 of 2005. with Civil Application (Stamp) No. 13422 of 2007 in F.A. No. 897 of 2005. with Civil Application 5635 of 2005 in F.A. No. 940 of 2005. Mr. K.K. Tated/Mr. Nakhwa/ Mr. A.R. Patil/Smt. Geeta Mulekar, Assistant Government Pleaders, for the State. -3- Mr. P.B. Shah with Ms. Smita Mane for the opponent- claimants in F.A. Nos. 986, 905, 906, 934, 993, 994, 997, 999, 1000, 1001, 1005, 1007, 1012, 1013, 1014, 1015, 1016, 1017, 1020, 1021, 1025, 1026, 1027, 1029, 1030, 1033, 1035, 1036, 1037, 1038, 1041, 1042, 1046, 1047 and 1051 of 2005. Mr. S.M. Gorwadkar for the opponent-claimants in F.A.Nos. 879, 898, 899, 900,903, 907, 908, 909, 910, 911, 912, 913, 914, 916, 917, 919, 920, 921, 922, 923, 924, 925, 926, 927, 928, 929,930, 931, 932, 1933, 935, 936, 937, 938, 940, 941, 942, 943, 944, 945, 946, 947, 948, 949, 950, 951, 952, 953, 1954, 955, 956, 958, 959, 960, 961, 962, 963, 964, 966, 967, 968, 969, 970, 971, 972, 974, 975, 976, 977, 978, 979, 980, 981, 982, 984, 985, 1986, 987, 988, 989, 990,991, 992, 995, 998, 1009, 1011, 1022, 1024, 1028, 1031, 1032, 1038, 1041, 1044, 1048, 1049, 1052 and 1053 of 2005 and Cross Objection (Stamp) Nos. 13417 and 13721 of 2007 and Civil Application (St.) No. 13422/07 and C.A.No. 5635 of 2005. Mr. Rameshwar N. Gite for the opponent-claimants in F.A. Nos. 996, 1003, 1004, 1006, 1013, 1017,1034, 1039, 1040, 1043, 1045 and 1050 of 2005. CORAM: SWATANTER KUMAR, C.J. & S.C. DHARMADHIKARI, J. Judgment reserved on : June 20, 2007 Judgment delivered on: July 19, 2007 JUDGMENT (Per Swatanter Kumar, C.J.): The above two appeals were taken as lead cases out of the bunch of 159 First Appeals listed together for hearing. Various learned counsel appearing for the respective parties advanced their arguments by referring to the evidence in these two cases. Thus, by this common judgment, we will dispose of all these appeals as they are based upon -4- common evidence and on somewhat similar facts. 2. The facts necessary for disposal of these appeals are that the Special Land Acquisition Officer, exercising his powers on behalf of the Government, issued a notification under Section 4 of the Land Acquisition Act, 1894 (hereinafter referred to as “the Act”), intending to acquire the land for the project of Mukane Dam from different villages as they were adjacent to each other. This also included the land from village Kavanai, Taluka Igatpuri, District Nashik. The notification was issued on 25th May, 1994 acquiring nearly 460.92.81 hectors of land. After issuance of this notification, undisputedly the procedure prescribed under the provisions of the Act was followed whereafter the Special Land Acquisition Officer vide his award dated 20th October, 1995, awarded compensation to the claimants in respect of the acquired lands at different rates of Rs. 35,000/-, 40,000/-, 45,000/-, 50,000/-, 55,000/-, 60,000/- and 65,000/- per hector depending upon various factors. The claimants being dissatisfied from the award of the said Officer preferred references under Section 18 of the Act which, in turn, were sent by the Collector to the Court of competent jurisdiction and the 5th Additional District Judge, Nashik, vide his judgment and award dated 31st August, 2004, granted additional compensation to the -5- claimants at the rate of Rs.1,20,000/-, 1,30,000/- and 1,50,000/- per hector depending upon the revenue to which these lands were assessed. Though the original claimants had accepted the compensation on 16th November, 1995, still they preferred references under Section 18 of the Act which were filed by them on 23rd December, 1995. They claimed compensation at the rate of (i) Rs.4,00,000/- per hector for bagayat/Tari (paddy) land, rabbi land and jirayat land and Rs. 1,00,000/- for pot kharaba land. The possession of the land was also taken by the acquiring authority on 1st July, 1994. Being aggrieved by the judgment and award dated 31st August, 2005, the State filed the above First Appeals before this Court questioning the correctness and legality of the judgment of the Reference Court passed in L.A.R. Nos. 88 of 1998 and 528 of 1997. 3. The impugned judgment is challenged by the State primarily on the ground that the compensation granted by the Reference Court is unduly excessive and, in fact, there is no evidence on record to support the finding recorded by the Court. It is also the contention raised on behalf of the State that the claimants had miserably failed to discharge their onus placed upon them for claiming any higher market value of the acquired land than the one awarded by the Collector. No instances -6- which are comparable and have the same potential, were proved by the claimants. In order to substantiate their submission, it was vehemently argued on behalf of the State that Exhibit-19 could not form the basis for determining the fair market value of the land as it relates to a small piece and there should have been a deduction of at least 50 per cent from the reflected value. Exhibits-30 and 39 again could not be made the basis for determination of the market value as they related to different villages which were located more than two kilometres away and the land covered under those exhibits was paddy land having a different potential than the acquired land. In order to justify their claims for enhancement, the claimants refuted the submissions made on behalf of the State to argue that, in fact, the compensation should have been granted on the basis of Exhibit-24 where the land in the same village was sold at the rate of Rs. 2 lakhs per hector, Exhibits P-14 and P-15 relating to the adjacent village where the land was sold at the rate of Rs. 2,12,000/- and even on higher prices. These instances were comparable and were having the same potential as stated by P.W.1. Even the awards pronounced by the Court in relation to notification under Section 11 of the Act for acquiring the lands covered by L.A.R. No. 109 of 1997 decided on 29th September, 2004, the compensation was awarded at the rate of Rs. -7- 1,20,000/-. The claimants also relied upon the sale deed dated 14th October, 1993 (Exhibit-17), where the land was sold at the rate of Rs. 1,15,000/- per hector. While referring to this documentary evidence read with the oral evidence led by the claimants, the claimants have claimed a sum of Rs. 3,00,000/- in one of the cross objections being Cross Objection (Stamp) No. 13417 of 2007 which was even barred by time. 4. According to the claimants, the learned Reference Court has fallen in error of jurisdiction by not awarding the same compensation which has been awarded in the area of the adjacent lands and the sale instances which were comparable and related to the lands having the same potential. Thus the claimants have prayed for further enhancement of the compensation. 5. At the very outset, we may notice that the cross objections preferred by the claimants are barred by time. It has been stated in the application for condonation of delay that the claimants are poor persons and the only source of income, that is the land, was taken away by the acquiring authority long time back and for a considerable time compensation was not paid to them which resulted in delay in filing the -8- cross objections. The State had filed the appeals in the year 2005 and the claimants, though were served for quite some time, but could not file the counter claims because of inadequacy of funds and their limitations that they belong to remote villages. Thus, keeping in view the above unavoidable circumstances, they have prayed for condonation of delay in filing the cross objections. There was some opposition on behalf of the State to this request of the claimants. From the averments made in the application, it is clear that the delay in filing the cross objections is not intentional. The reasons stated are bona fide and are capable of being construed as a sufficient cause within the meaning and scope of Section 5 of the Limitation Act. These are cases of compulsive acquisition and not a voluntary act on the part of the claimants. It can hardly be disputed that the lands which were the principal source of their income have been taken away by the State contrary to their consent. It can hardly be expected of the State to oppose such a request particularly when their Appeals arising from the same judgment are being heard on merits. It is a settled percept of law that provisions of Limitation Act should be construed liberally so as to ensure that justice does not suffer. The Supreme Court has often said that certain amounts of latitude is not impermissible and the expression “sufficient cause” may be considered with pragmatism in justice- -9- oriented approach rather than technical detection of sufficient cause for explaining the delay. In some cases, the Supreme Court also condoned the delay of nearly 679 days. Reference can be made to the cases of The Special Tehsildar, Land Acquisition, Kerala vs. K.V.Ayisumma, JT 1996 (7) SC 204 and State of Haryana vs. Chandra Mani and others, JT 1996 (3) SC 371. The cause shown by the claimants can safely be construed as a sufficient cause emerging from the limitations relating to their needs seen in the light of the past events that their lands were acquired against their wishes and whereafter even compensation was not paid to them for quite some time. It is not even in dispute before us that till date they have actually not received the enhanced compensation granted to them by the Reference Court. For these reasons, we have no hesitation in accepting their application for condonation of delay. Another reason for condoning the delay is that the State appeals arising from the same judgment were being heard by the Court when this request was made on behalf of the claimants. Thus, even the interest of justice would demand that the cross-objections of the Claimants are heard along with the State appeals. Consequently, the delay in filing the cross objections is condoned. The cross objections are admitted for hearing. -10- 6. We have heard the learned counsel appearing for different parties at great length and we are of the view that the findings recorded by the learned Reference Court in the judgment under appeal can hardly be termed as erroneous or contrary to the settled principles of law. However, some aspects of the judgment do require consideration as we find that there is no direct and substantive evidence to justify recording of some findings, particularly in relation to classification of the land. The reliance placed by the claimants upon Exhibit-24 has rightly been rejected by the reference court. It is an agreement executed between Shri Lahanu Valu Ghode and Shri Malu Genu Shirsat for sale of one acre of land from Gat No. 944 for sale consideration of Rs. 40,000/-. This agreement to sell was executed on 17th December, 1993, prior to the date of issuance of notification under Section 4 of the Act in the present case but is inconsequential for being the basis for determination of any fair market value of the land in question. An agreement to sell is no substantive evidence which could in law reflect the real market value of the land in question. Nobody has appeared in the witness box from either of these witnesses to confirm that in furtherance to the agreement to sell, a sale deed was executed or that even there was part performance of the agreement as contemplated under Section 56 of the Transfer of Property Act. A mere agreement to -11- sell would in no way convey the title in the property and thus be termed as a proper sale instance admissible in evidence for determining the controversy in question. This document has, therefore, been rightly rejected by the learned reference Court. Exhibits-14, 15 and 30 relate to different villages, though adjacent to the revenue estate of the village from where the land in question has been acquired. This evidence clearly shows that the value of the surrounding land was shown to be nearly Rs. 1,20,000/- to Rs. 2,12,000/- per hector. 7. It is a settled principle of law that the land of the adjacent villages can be made the basis for determining the fair market value of an acquired land. This principle of law is qualified by a clear dictum of the Supreme Court itself that wherever direct evidence i.e. the instances from the same village are available then it is most desirable that the Court should consider those instances rather than relying upon sale instances of the adjoining land. The exclusion of these exhibits from the zone of consideration for determination of the controversy thus cannot be said to be incorrect in law. The land in Exhibit-30 relates to village Mukane,while Exhibits-14 and 15 relate to the other two villages viz. Modade and Rayambe. These villages are located around the acquired land but have a better potential as they are closer to -12- industrial area and the Highway. The evidence tendered in relation to the land of the adjacent villages would be a relevant piece of evidence for determining the market value of the land and even the awards relating to those adjoining villages would also be a relevant consideration. Reference in this regard can be made to the case of Sham Krishan Chandiwala vs. Union of India, 1978 (14) DLT 83 and judgment of the Supreme Court in the case of Harcharan vs. State of Haryana, AIR 1983SC 43, where the Court stated that subject to the test of comparison of land areawise, topographywise and usewise, awards and transactions in relation to the adjacent areas are the best evidence with regard to valuation of price of land. Still, in the case of Gokal vs. State of Haryana, AIR 1992 SC 150, the Court was concerned with awarding of compensation to the land similarly situated but vide different notifications issued by the Government under Section 4 of the Act. Trend in increase of the land prices in those areas was also taken to be a relevant consideration. 8. Potentiality of the land is the true element of value and besides its basic concept it also includes the probabilities and possibilities in regard to the use of the area. The potential of the land has to be of the period relatable to the time of acquisition and mere -13- future potential may not be a relevant consideration. The distinction between surrounding areas which are already developed, by itself would not render the acquired land, which is not so developed, for claiming similar amount. A Division Bench of Delhi High Court in the case of Gian Chand (deceased) through LRs and others vs. Union of India aand others, decided on 9th March, 2006 held as under: “ A Division Bench of this Court in the case of Anar Singh vs. Union of India, AIR 1985 Delhi 298 held as under:- “ In our opinion the learned Judge assessed the value on a totally wrong basis. Potentiality is a right and proper subject for consideration in ascertaining the compensation to be paid on expropriation. Prospects and possibilities of future development ought to be taken into account in determining the price to be paid for property compulsorily acquired. One other observation must be made here. The learned judge went by his experience. But what is that experience he has not told us. A case has to be decided not on one's own predications but on such materials as are available to the valuer. If there are no instances of sale available of this very village it is permissible for the valuer to go to the adjoining village and ascertain the value of the land situated in close proximity. He can then give proper weight to the factors not favourable and unfavourable in the process of evaluation. It has to be remembered that the “value of the potentiality must be ascertained by the valuer “on such materials as are available to him and without indulging in the feats of the imagination” (Narayana Gajapatiraju (supra) at p. 548 (of ILR): (at P. 103 of AIR 1939 PC 98).” 15. Reference in this regard can also be made to another judgment of this Court in the case of Mani Ram -14- Sharma and etc. vs. Union of India, AIR 1986 Delhi 140. 16. Prospective use of a land or its future potential and development by itself may not be a very material consideration for the Court in determining the value of the acquired land. (Refer Tarlochan Singh and another vs. State of Punjab and others, 1995 LACC 283 (Supreme Court). But once the claimant has discharged its onus by placing on record appropriate evidence by filing judicial pronouncements, sale deeds or other relevant piece of evidence, even of the adjacent villages, in that event the court would have to take into consideration the potential of the land, keeping in view the larger development. 17. In the present case, the land has been acquired for 'Planned Development of Delhi', which itself is a public purpose and a continuing one. The development obviously cannot be restricted to a limited area and it is intended to develop the entire city of Delhi. This expression has been given a larger meaning and connotation. 'Planned development of Delhi' shall take within its ambit and scope the prospective development as huge tracks of lands are acquired for that purpose. With the acquisition of an area for planned development of Delhi, the prices of the lands of the adjacent villages is bound to go up. This is a normal and natural consequence. 18. The learned counsel appearing for the respondent while relying upon the judgment of the Supreme Court in the case of Kanwar Singh and others vs. Union of India, JT 1998 (7) SC 397 contended that same compensation cannot be awarded for the lands falling in two different villages and compensation in respect of the land of one village in comparison to the compensation granted in adjoining village is not a relevant consideration. 19. Firstly, the contention of the learned counsel appearing for the respondent is based upon misreading of the law enunciated in the case of Kanwar Singh (supra). The Supreme Court in that case has clearly stated that generally there would be a different situation and potential of the land situated in two different villages, but once it is proved that -15- situation and potential of the land in two different villages are same, then they could be awarded similar compensation. The claimants have to demonstrate that the compensation offered by the Collector is not adequate and does not reflect the true market value of the land as on the date of notification in either of the concerned villages.” 9. In light of the above principles, it can safely be stated that it is for the claimants to lead cogent evidence for claiming higher amounts with reference to the lands of the adjacent villages. We have already indicated that the lands shown in Exhibits-30 and 42 relate to different villages and those villages in terms of the evidence on record are better placed, closer to industrial areas and they would not be, therefore, a fair guide for determination of fair market value. The Reference Court considered it necessary not to discuss the matter in any further elaboration. Having relied upon Exhibit-19 and with reference thereto, it recorded the following findings in its judgment. “ 36. In the light of the said principles, let us now take into consideration as to which of the sale instance as relied on by the claimants can be helpful to us to determine the correct market value of the acquired lands. The sale deed at Exh. 30 though is duly proved by the claimants appeared to be pertaining to the lands from different village area. Here we have a sale instance of the land which is more proximate in time, in the form of sale deed at Exh. 19 and therefore in the light of the ratio laid down by the Apex Court in the case cited supra (AIR 1999 SC 317), I do not find it proper to consider this sale deed (Exh.30) as a determinative factor. It is no doubt true that the lands -16- at village Mukane and Kavanai are situated in the same taluka ande are adjacent to each other and are having similar geographical situation. Even then the potentialities of these lands differ in view of their locations and the distances from the industrial area. I am therefore not inclined to accept the submissions of the learned counsels for the claimants that the market value be determined at the same rate at whichthe land in this sale deed was sold. 37. For the similar reasons, I am not inclined to take into consideration the valuations made by predecessor in the Land References referred above. So far as the evidence in theform of an agreement of sale at Exh. 24 in L.R. No. 528/97 is concerned, it is also of no help to the claimants. This sale instance is pertaining to the land Gat No. 437 from village Mukane. This transaction appears to be at the rate of Rs. 3,18,500/- i.e. At the rate of double than that of the rate decided by my predecessor in the said Land References. This agreement of sale is not finally executed by executing a registered sale-deed. The deed is dated 17.12.1993 i.e. after the publication of the notification of acquisition of the lands in the village area of Mukane. The probability of registration of such agreement just for creating an evidence in acquisition proceedings cannot be over-ruled.