IN THE HIGH COURT OF GUJARAT AT AHMEDABAD FIRST APPEAL No 106 of 2000 with FIRST APPEAL No 323 of 2000 and CIVIL APPLICATION No 3333 of 2000 For Approval and Signature: Hon'ble MR.JUSTICE M.H.KADRI and Hon'ble MR.JUSTICE C.K.BUCH ============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements? 2. To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement? 4. Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? 5. Whether it is to be circulated to the Civil Judge? : NO -------------------------------------------------------------- VILUBEN JHALEJAR CONTRACTOR Versus STATE OF GUJARAT -------------------------------------------------------------- Appearance: 1. First Appeal No. 106 of 2000 MR YN OZA, SR. ADVOCATE WITH MR AMAR N BHATT for Appellant MR SJ DAVE, AGP for Respondent 2. First Appeal No. 323 of 2000 MR SJ DAVE, AGP for Appellant MR YN OZA, SR. ADVOCATE WITH MR AMAR N BHATT for Respondent -------------------------------------------------------------- CORAM : MR.JUSTICE M.H.KADRI and MR.JUSTICE C.K.BUCH Date of decision: 07/07/2000 C.A.V. JUDGEMENT ( Per: M.H. Kadri, J. ) 1. First Appeal No.106 of 2000 is filed under Section 54 of the Land Acquisition Act, 1894 (hereinafter referred to as the "the Act" ) read with Section 96 of the Code of Civil Procedure, by the original claimants claiming enhanced compensation for their acquired land, challenging the judgment and award dated January 31, 2000 passed by the learned District Judge, Panchmahals at Godhra, in Land Reference Case No.7 of 1985. 1.1 The appellant-State of Gujarat has filed First Appeal No.323 of 2000 challenging the judgment and award of the learned District Judge, Panchmahals at Godhra, in Land Reference Case No.7 of 1985, by which the learned District Judge determined the market value of the acquired lands of claimants situated at town Santrampur, District Panchmahals at the rate of Rs.134/- per square metre as on February 15, 1979. 1.2 As both the appeals relate to the challenge of the judgment and award of the learned District Judge in Land Acquisition Case No.7 of 1985 and as common question of facts and law are involved in these appeals, we propose to dispose of them by this common judgment. 2. The Executive Engineer, Rehabilitation Division, Godhra, by his letter dated January 7, 1978, sent a proposal to the State Government to acquire lands of town Santrampur as the same were coming under submergence of water of Kadana Jalagar Yojna due to logging of water of Kadana Dam. Said proposal was scrutinized by the State Government and preliminary notification under Section 4(1) of the Act was published in the Government gazette on February 15, 1979. Individual notices were served on the claimants. After following usual procedure under Section 5-A and 5-A (2) of the Act, a declaration under Section 6 of the Act was made which came to be published in the Government gazette on October 13, 1980. The corrigendum to the declaration under Section 6 was made which came to be published in the Government gazette on March 5, 1982. The claimants were served with the notices under Section 9 of the Act. In response to the notices as stated above, the claimants claimed compensation at the rate of Rs.50/- per square feet for their acquired lands. The Land Acquisition Officer on the basis of material produced before him made his award under Section 11 of the Act on March 3, 1982 and offered market price of the acquired lands ranging from Rs.35/- to Rs.60/- per square metre. 2.1 The claimants were of the opinion that the compensation offered by the Land Acquisition Officer was grossly inadequate because the acquired lands were already non-agricultural lands and were situated in the outskirts of town Santrampur, which was fully developed area. The claimants, therefore, filed application under Section 18 of the Act requiring the Land Acquisition Officer to refer the application to the District Court Panchmahals for the determination of the market value of the acquired lands. Accordingly, the application filed by the claimants was referred to the District Court Panchmahals at Godhra which came to be numbered as Land Acquisition Case No.7 of 1985. In the Reference Application the claimants contended that all the 16 plots acquired were situated adjoining to each other and were abutting on the main road. It was claimed that J.H.Mehta High School, Government Rest House, officers' quarters, garden and other residential premises were situated near the acquired land and acquired land could have been sold for residential purpose to any Cooperative Housing Society. It was claimed that the acquired land was known as Old Distillery Compound wherein the ancestors of the claimants were running distillery which was closed after coming into force of the Bombay Prohibition Act, 1949. It was further claimed that on the acquired lands, ice factory, pulse and rice mills were already in existence when the lands came under submergence of the waters of Kadana Jalagar Yojna. Before the Reference Court the claimants claimed compensation of their acquired lands at the rate of Rs.200/- per square metre which was subsequently amended and enhanced to Rs.250/- per square metre. 2.2 The State of Gujarat filed written statement at Exh.15, inter-alia contending that the Land Acquisition Officer had taken into consideration the prevailing market price of the acquired land on the date of issuance of notification under Section 4 (1) of the Act and had awarded just and adequate compensation. It was further averred that the Land Acquisition Officer had taken into consideration the sale deeds which reflected the market price of the surrounding lands, prior to the date of the issuance of notification under Section 4 (1) of the Act. The opponent further claimed that the compensation claimed by the claimants at the rate of Rs.250/- per square metre was highly exaggerated looking to the situation of the acquired land and the market price of the adjoining land prevailing on the relevant date, and therefore, the application be dismissed with costs. 2.3 The record indicates that Land Acquisition Case No.7/85 was placed for hearing before the learned Extra Assistant Judge, Panchmahals at Godhra, who on rival assertion of the parties framed issued at Exh.13. Thereafter, the above Reference was transferred to the Court of District Judge, Panchmahals at Godhra. The claimants to substantiate their claim for enhanced compensation, examined one of the claimants namely Barjorbhai Jalejar Contractor at Exh.30. The witness claimed that all the acquired lands were converted into non-agricultural use since many years, wherein ancestors of the claimants were carrying on business of distillery, ice factory, rice and pulse mills. He claimed that Taluka Santrampur was consisting of 599 villages and was the biggest taluka of the Gujarat State; that Santrampur was the headquarter of the taluka wherein all Government offices were situated. He further claimed that the acquired lands were situated on the bank of river Suki and were adjacent to Government Rest House. He further claimed that Santrampur-Godhra Highway was passing, near the acquired lands. He claimed that before the lands were placed under acquisition, the area known as Pratappura, in which lands were situated, was already developed as compared to the locality known as Godhra Bhagol. He deposed that in 1949 due to introduction of Bombay Prohibition Act, the distillery was closed, and thereafter the ancestors of the claimants had continued the business of rice and pulse mills. It was stated that rice and pulse mills were situated on the vast area covering about 24,000 square metres of the acquired lands. He stated that the acquired lands were fully developed and could have been sold to Cooperative Societies for construction of residential houses. He further stated that due to construction of Kadana Dam and due to water logging which had caused submergence of the acquired lands, the development of Pratappura had practically stopped and the development was shifted to the area known as Godhra Bhagol. The witness during his deposition produced documentary evidence such as certified copies of the property card maintained by City Survey and sale deeds of adjoining lands. The witness during his deposition also referred to sale deeds in respect of city survey No.1177 which was executed on December 20, 1978. However, no witnesses were examined to prove the sale deeds produced by the claimants. The evidence of claimants' witness Barjorbhai Jalejar Contractor thus indicated that the acquired lands which were situated in the area known as Pratappura were developed lands for which N.A. permission was already obtained since many years prior to the date of the acquisition. The evidence of this witness also indicated that after submergence of the acquired lands, the development in Pratappura had stopped and the area known as Godhra Bhagol had picked up development. The record indicated that the opponent did not lead evidence, either oral or documentary before the Reference Court. The learned District Judge by his judgment and award dated April 16, 1996 partly allowed the Reference Application filed by the claimants and determined the market value of the acquired lands situated in Pratappura area as on February 15, 1979, at the rate of Rs.225/- per square metre which was challenged by the State of Gujarat by filing First Appeal No.5041/96. The above numbered First Appeal came to be heard by the Division Bench ( Coram : M.R.Calla & R.P.Dholakia, JJ.) and the Division Bench by its judgment order dated May 11, 1999, allowed the First Appeal by quashing and setting the award of the District Court and remanded the case to the Reference Court as the market value determined by the Reference Court was Rs.225/- per square metre, whereas the claimants had claimed the compensation for their acquired lands at the rate of Rs.200/- per square metre. The Division Bench further held that the sale deed which was produced before the Reference Court was not duly proved in the eye of law as neither the vendor nor the vendee of the sale deeds were examined before the Reference Court. Thus, the Division Bench was of the opinion that the Reference Court had taken into consideration the sale deed which was not duly proved in the eye of law, and therefore, the entire judgment and award based on document which was otherwise not admissible in law which was made basis for the purpose of determination of the market value of the acquired lands. To do substantial justice and to award just and fair compensation to the claimants, the Division Bench remanded the Reference Application to the District Court for deciding it afresh after affording reasonable opportunity to both the sides for producing the evidence and deciding the Reference denovo in accordance with law after affording an opportunity to lead evidence to both the sides. 3. After the remand of the Reference Application to the District Court, the claimants Barjorbhai Jalejar Contractor was again examined on October 10, 1999. He deposed that Kadana Dam was constructed in the year 1968 on the river Mahisagar; that after the construction of the dam, there were heavy floods in the year 1973 and due to heavy floods, their lands were submerged under the water. He deposed that the height of the dam above the sea level was 419 feet, whereas height of water due to floods had risen up to 423 feet. He also deposed that there were heavy floods in the year 1976 and the acquired lands were again submerged under the waters of Kadana Dam. A representation was made to the State Government to acquire the lands as the lands were coming under submergence due to frequent heavy floods and water logging. He stated that the State Government had resolved that lands which were upto the height of 434 square feet of sea level should be placed under acquisition. He gave description of the acquired lands and stated that the lands were already developed wherein business activities of distillery, rice and pulse mills were being carried on. He also stated that many residential houses were situated on the acquired lands and the possession of the acquired lands was taken by the State Government in March, 1978. He claimed that all the acquired plots were of even lands wherein facilities such as electricity, water and roads existed. He deposed that the lands were already used before the acquisition for the purpose of residence and running industries. He further stated that the survey No.1177 of the same town was sold in December 1978 at the rate of Rs.270/- per square metre. He claimed that after the lands of area Pratappura were placed under acquisition, the development in Santrampur Town had shifted towards the area known as Godhra Bhagol. In the cross-examination the witness deposed that lands of survey No.1177, were situated in the residential locality known as Godhra Bhagol, which was not fully developed as compared to Pratappura area. He deposed that due to acquisition of the lands rice and pulse mills were closed in the year 1978. He admitted that river Suki was flowing between the area Pratappura and Godhra Bhagol. He also deposed that the area of the acquired lands was very large, but it was connected by two roads one leading from temple of Hanumaji, whereas the other was from Fatehpura. In the cross-examination the witness also deposed that in the locality of Pratappura, many cloth shops were also situated. He denied that the price of land in the area of Godhra Bhagol was higher than the lands of Pratappura. 3.1 The claimants after the remand examined Moinudin Sadrumiya Shaikh who was serving at Santrampur Municipality at Exh.112. The evidence of this witness suggests that till the year 1978, Pratappura was fully developed area wherein Government quarters, High School, office of District Panchayat, Panchmahals were situated. He deposed that because of the acquisition of the lands, the development in Pratappura area had practically stopped and the development had shifted towards Godhra Bhagol. The witness during his deposition produced certified copy of the assessment with regard to the new houses which were constructed in the area known as Godhra Bhagol between period 1974-75 to October 1999. The witness emphathetically deposed that the situation of the lands placed under acquisition was better than the lands which were not acquired of the same area Pratappura. The evidence of this witness recorded during the cross-examination also indicated that Santrampur Taluka was the biggest taluka of the State of Gujarat. The evidence of this witness further indicated that after the acquisition of the lands of area Pratappura, there was not much development of the said area and the development had shifted towards the area which was known as Godhra Bhagol. In short, the evidence of this witness shows that the acquired lands were fully develped having facilities like electricity, water drainage, roads etc., which were being used for residential, agricultural and commercial activities. 3.2 After the remand, the claimants examined Jivrajbhai Sundarlal Pandit at Exh.144. Said witness is the husband of vendee Saraswatiben who had purchased the land of survey No.1177 admeasuring 46.30 square metres, situated in the area Godhra Bhagol of Taluka Santrampur on December 20, 1978 for a total consideration of Rs.20,000/-. The evidence of this witness indicated that prior to execution the sale deed Exh.145 with respect to lands and house situated on survey No.1177, negotiations for sale had taken place before twelve months and thereafter eventually the sale deed was executed on December 20, 1978, which was registered before the Sub Registrar, Lunawada. The witness deposed that he was fully conversant with the sale transaction i.e. Exh.145 and was present when it was executed and when it was registered at the office of Sub Registrar. The witness during his deposition also identified the signature of two attesting witnesses to the sale deed Exh.145. The witness Jivraj Sundarlal Pandit in paragraph 4 of his deposition, claimed that when sale deed Exh.145 was executed in December 1978, the area of Godhra Bhagol was not fully developed, whereas the area of Pratappura was having more population and was fully developed area. He further deposed that the price of lands of the area of Pratappura was higher than the lands of Godhra Bhagol. During the cross-examination, the witness deposed that when the land of survey No.1177 was purchased, house having one room was already in existence and remaining land was open. The witness denied the suggestion that sale deed Exh. 145 was not a transaction between a willing buyer and willing purchaser. He denied the suggestion that higher price was paid for the land and house situated on survey No.1177 which were purchased by sale deed exh.145. On the contrary the evidence of this witness indicated that the price of the land with superstructure of Survey No.1177 was arrived at with the help of 5 persons. The witness denied that he was not present and was not conversant with the sale transaction. The evidence of this witness indicated that Exh.145 was genuine sale deed executed on December 20, 1978 between his wife Saraswatiben and vendor Kanaiyyalal Sindhi. In our opinion, this witness was competent to depose and to prove the contents of sale deed Exh.145. 3.3 After the remand of the Reference Case No.7/85, the opponents did not examine any witnesses nor produced documentary evidence before the Reference Court. 4. The Reference Court on overall appreciation of oral as well as documentary evidence and after hearing the arguments of the learned advocates of the parties deduced that sale deed Exh.145 was relevant and comparable to ascertain the market value of the acquired lands, but observed that land of sale deed Exh.145 was situated in another area i.e. Godhra Bhagol and the sale deed was in respect of very small area of 46.30 square metres of land. The Reference Court to determine the market value of the present acquired lands did not take into consideration previous award of the learned Assistant Judge, Panchmahals at Godhra, rendered in Land Reference Case No.273/85, decided on November 29, 1997 produced at Exh.150, which was in respect of acquired lands of the same area Pratappura which came to be acquired in the year 1984, wherein the Reference Court had determined the market value of the acquired lands at the rate of Rs.163/- per square metre as on May 3, 1984. The learned District Judge was of the opinion that as previous award Ex.150 was challenged by the State of Gujarat by filing First Appeal No.2338/98 against the determination of market value by the Reference Court which was pending on the date of passing of the impugned award and therefore it cannot be said that the said previous award had become final. The record of First Appeal indicates that the claimants have filed Cross Objection No.277 of 1999 in First Appeal No.2338 of 1998 for enhancement of compensation. Therefore, in our view the Reference Court was justified in not placing reliance on the award Exh.150 for the determination of the market value of the present acquired lands, on the ground that the said award had not become final, more particularly when the evidence in the nature of sale-deed Exh.145 was produced on the record in the Reference Court. The Reference Court deduced that award of L.R. No.273/85 (Ex.150), was not previous award as the notification under Section 4(1) of the Act in respect of acquired lands of award Exh.150 was published after 5 years of the notification of the present acquisition. The Reference Court further deduced that if reliance is placed on sale deed Exh.145 in respect of smaller area of lands, appropriate deduction and deduction such as the time and expenses required for formation of the lay out the period for which the money would be locked up in the investment and the waiting period as also for the reduced price for the lands and when the lump sum payment is made, are also required to be considered. On the abovesaid reasons the Reference Court observed that it can reasonably be concluded that the lands under acquisition would have fetched at least Rs.200/- per square metre. The Reference Court deduced that if the lands were not acquired and if the claimants intended to convert the entire lands into small plots for residential purpose, the claimants would have incurred development charges which may vary between 33 % to 53 % as per the decision of the Supreme Court in 1996 (3) SCC 776 Smt. Basavva and others vs. Special Land Acquisition Officer and others, further deducted 33 % towards development charges and determined the market value of the present acquired lands at the rate of Rs.134/- per square metre. The Reference Court did not award statutory benefit under Section 23 (1A) of the Act because the award by the Reference Court was made prior to coming into force of the amended Act of 1984. However, the Reference Court extended statutory benefits of solatium under Section 23 (2) and interest as per amended Section 28 of the Act which has given rise to filing of these appeals by the claimants and the State of Gujarat. 5. Learned senior advocate Mr. Y.N.Oza, who appeared on behalf of the original claimants and learned A.G.P, Mr. S. J. Dave has taken us through the entire record and proceedings and paper books supplied by the learned counsel for the claimants which included relevant evidence and documents. Learned senior advocate Mr. Oza has argued that it is not an absolute proposition of law that in all cases where market value of large area of land is to be determined by basing on the price of the sale with respect of small plots of land, a suitable deduction should be made. Learned counsel for the claimants further submitted that if the lands of sale deed covering small plots of land is situated in a developed area, no deduction should be made for the purpose of ascertaining the market value covering large area which was already developed. In support of the submission, learned senior counsel has placed reliance on the decision of Bhagwahula Samanna and Ors. vs. Special Tahsildar and Land Acquisition Officer, Vishakhapatnam Municipality, Vishakhapatnam (1991) 4 Supreme Court Cases, 506. Learned senior counsel Mr. Oza therefore urged that the claimants had adduced sufficient evidence that the acquired lands were fully developed wherein commercial activities were carried on prior to the date of the acquisition and the Reference Court was not justified in applying deduction twice on the ground of acquired lands having large area and secondly on the ground of development charges. Learned senior counsel further urged that out of the acquired lands some plots were covering small area where residential houses were in existence, and therefore, also the Reference Court ought not to have applied the principle of deduction on the ground of acquired lands having large area and on the ground of development charges. Learned counsel for the claimants stressed that sale deed Exh.145 which was in a fully developed area of Godhra Bhagol was most relevant and comparable for the ascertainment of the market value of the present acquired lands which was also situated in a fully developed area. It is stressed by learned counsel for the claimants that sale deed Exh.145 was duly proved by the husband of vendee Sarasvatiben and the husband was conversant and had actually taken part in the sale transaction. It is further claimed by the learned senior counsel for the claimants that sale deed Exh.145 was the genuine sale deed between the willing buyer and willing purchaser and the market value of which reflected that the land bearing survey No.1177 of sale deed Exh.145 was sold at the rate of Rs.270/- on December 20, 1978. Learned senior counsel further submitted that the present acquired lands were situated in most developed area having all the advantages and potentiality, and therefore, the claimants should be awarded compensation for the acquired lands at the rate of Rs.250/- per square metre. Learned senior