( 1 ) fa24.92 IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD FIRST APPEAL NO. 24 OF 1992 Vithal s/o. Namdeo Patil .. Appellant Age. 50 years, Occ. Agriculture, R/o. Karanjgaon, Tal. Omerga, Dist. Osmanabad. Versus The State of Maharashtra, .. Respondent Through Collector, Osmanabad. Shri S.P. Urgunde, Advocate for the appellant. Shri K.S. Patil, A.G.P. for respondent/State. CORAM : R.M. BORDE, J. DATED : 04.07.2011 O R A L J U D G M E N T :- 1. The appellant/original claimant has presented this first appeal raising exception to the judgment and award passed by the Jt. Civil Judge, Senior Division, Osmanabad, on ( 2 ) fa24.92 22.09.1989, granting compensation in respect of acquired land at the rate of Rs. 10,000/- per acre. The agricultural land belonging to the claimant, out of Survey No. 75/2, admeasuring 3 Hectare 19 R of village Karanjgaon, Tal. Omerga, has been acquired by the State Government for construction of Lower Terna Irrigation Project. The lands belonging to the agriculturists from village Makni as well as Karanjgaon came to be acquired for the project. A notification under Section 4 of the Land Acquisition Act was published on 07.10.1982 and after following the procedure prescribed in the Land Acquisition Act, the award came to be passed on 17.05.1984. The Land Acquisition Officer awarded compensation at the rate of Rs. 4705/- per acre, in respect of the acquired agricultural land. According to the claimant, the acquired land is black cotton soil and the land was having facility of irrigation. With the help of two wells situated in the land the claimant used to take Bagayat crops, such as, Chili, Groundnut, Sugar-cane etc. Village Karanjgaon is situated at a distance of 5 kms. From village Makni. It is comparatively developed village. It is stated that the land acquired is within command area of Killari ( 3 ) fa24.92 Sugar Factory, which is situated at 13 kms from the village of the claimant. The claimant is shareholder of the sugar- factory and used to sell sugar-cane to the factory. Considering all these aspects the claimant claimed compensation at the rate of Rs. 20,000/- per acre for the Bagayat land. 2. The Reference Court, on consideration of relevant evidence led by the claimant, prescribed the market value of the land as Rs.10,000/- per acre. With the assistance of the learned Counsel appearing for the parties, I have perused the judgment and award passed by the Reference Court and have also gone through the oral as well as documentary evidence placed on record by the claimants in order to substantiate his claim. The claimant entered into witness box and has reiterated his contentions as regards quality and fertility of the land acquired. According to the claimant, out of the acquired land, there was irrigation facility available throughout the year for four acres of land i.e. four acres of land was perennially irrigated and remaining four acres was seasonally irrigated. It is stated by the claimants that ( 4 ) fa24.92 there are two wells situated in the land, out of which one is constructed and other well which is not constructed, is on the bank of the river. The claimant used to take crops like sugar-cane, chili, ground-nut etc. in his land. The claimant claims that he was selling sugar-cane to the factory and was also supplying sugar-cane for producing jaggary. The claimant has placed on record a certificate issued by sugar factory showing that he is member of the sugar factory and also used to send sugar-cane to the factory. The claimant claims that he was selling 40-50 tonnes sugar-cane to the factory, which gives yearly yield of Rs. 10,000/-. He has stated that the distance between Latur and his village is around 20 kms. whereas other market place like Solapur is at about 25 kms. The claimant claims that he has developed his agricultural land and enhanced the production potentiality with a view to secure good income. 3. Witness No.2 for the claimant is one Krishna Devrao Pawar, who has deposed that he has sold 2 acres 15 gunthas land for consideration of Rs. 28,000/- prior to some 5-7 years. The land sold was situated at village Nagur. ( 5 ) fa24.92 According to him, the land which has been sold and the land belonging to the claimant is at shorter distance. 4. Another witness who has been examined is one Jangalu Karim Sayad as claimant’s witness No.3, who has deposed about sale instance in respect of one acre land of village Sastur, which has been sold for consideration of Rs. 14,500/- to Vijaykumar Diggikar, in the year 1992 by Keshav Ambaji Barkule. The witness states that he was attesting witness for the sale transaction. The distance between the land covered under the sale instance and the acquired land is about 1 km. 5. Claimant’s witness No.4 states that he has sold 1 acre 5 gunthas land at the rate of Rs. 11,000/- per acre to one Namdeo More in the year 1983. There are about 5-6 lands in between the acquired land and the land sold by the witness. There is another sale instance placed on record at Exh.38 in respect of 96 R land which has been sold for consideration of Rs. 27,000/- on 30.03.1983. The claimant has thus placed reliance on the evidence in the form of ( 6 ) fa24.92 comparable sale instance, which has been brought on record by examining witnesses who have deposed about the sale transactions as well as quality and fertility of the land covered under the sale instance as well as acquired land. 6. The Reference Court has taken into account the sale instance at Exh.28 in respect of 1 acre land dated 28.06.1982, which has been sold for consideration of Rs. 14,500/- as well as Exh.37, which is sale instance in respect of 1 acres 4 gunthas land which has been sold for consideration of Rs. 11,000/- on 11.05.1983. The sale instances at Exh.28 and 37 both pertain to dry crop lands whereas the land acquired by the State belonging to the claimant is irrigated land. The land covered by sale instance at Exh.37 is at shorter distance from the acquired land and although the sale instance is dated 11.05.1983 i.e. some seven months after Section 4 Notification, same is relevant for consideration for arriving at correct market price of the acquired land. There is no evidence led by the State Government that by the reason of proposed acquisition of irrigation project, there was spurt in the prices of ( 7 ) fa24.92 agricultural property. Although sale instance at Exh.37 is 5-7 months after Section 4 Notification, in the absence of there being evidence of spurt in the prices of agricultural land, the evidence in respect of sale instance at Exh.37 is relevant for consideration. It is also to be taken note of that Exh.28 is sale instance in respect of 1 acre land which is situated at a distance of 1 km. which is pre-notification sale and price fetched is Rs.14,500/-. It is not disputed that the sale instance at Exh.28 is in respect of dry crop land whereas the land acquired belonging to the claimant is having irrigation facility. The claimant’s land thus shall fetch higher price. The Reference Court ought to have prescribed higher price for the acquired land than the price depicted from the sale instance placed on record by the claimants. 7. The Apex Court in the matter of Chimanlal Hargovinddas Vs. Special Land Acquisition Officer and another, (1988) 3 SCC 751 stated the principles beyond ambiguity and the Court serialized the factors relating the discretion of awarding compensation by the Court as under :- ( 8 ) fa24.92 "Before tackling the problem of valuation of the land under acquisition it is necessary to make some general observations. The compulsion to do so has arisen as the Trial Court has virtually treated the award rendered by the Land Acquisition Officer as a judgment under appeal and has evinced unawareness of the methodology for valuation to some extent. The true position therefore requires to be capsulized: 4) The following factors must be etched on the mental screen: (1) A reference under section 18 of the Land Acquisition Act is not an appeal against the award and the Court cannot take into account the material relied upon by the Land Acquisition Officer in his Award unless the same material is produced and proved before the Court. (2) So also the Award of the Land Acquisition Officer is not to be treated as a judgment of the trial Court open or exposed to challenge before the Court hearing the Reference. It is merely an offer made by the Land Acquisition Officer and the material utilized by him for making his valuation cannot be utilized by the Court unless produced and ( 9 ) fa24.92 proved before it. It is not the function of the Court to sit in appeal against the Award, approve or disapprove its reasoning, or correct its error or affirm, modify or reverse the conclusion reached by the Land Acquisition Officer, as if it were an Appellate Court. (3) The Court has to treat the reference as an original proceeding before it and determine the market value afresh on the basis of the material produced before it. (4) The claimant is in the position of a plaintiff who has to show that the price offered for his land in the award is inadequate on the basis of the materials produced in the Court. Of course the materials placed and proved by the other side can also be taken into account for this purpose. (5) The market value of land under acquisition has to be determined as on the crucial date of publication of the notification under section 4 of the Land Acquisition Act (dates of Notifications under sections 6 and 9 are irrelevant). (6) The determination has to be made standing on the date line of valuation (date of publication of notification under section 4) as if the valuer is a ( 10 ) fa24.92 hypothetical purchaser willing to purchase land from the open market and is prepared to pay a reasonable price as on that day. It has also to be assumed that the vendor is willing to sell the land at a reasonable price. (7) In doing so by the instances method, the Court has to correlate the market value reflected in the most comparable instance which provided the index of market value. (8) Only genuine instances have to be taken into account. (Sometimes instances are rigged up in anticipation of Acquisition of land). (9) Even post notification instances can be taken into account (1) if they are very proximate, (2) genuine and (3) the acquisition itself has not motivated the purchaser to pay a higher price on account of the resultant improvement in development prospects. (10) The most comparable instances out of the genuine instances have to be identified on the following considerations: (i) proximity from time angle, ( 11 ) fa24.92 (ii) proximity from situation angle. (11) Having identified the instances which provide the index of market value the price reflected therein may be taken as the norm and the market value of the land under acquisition may be deduced by making suitable adjustments for the plus and minus factors vis-a-vis land under acquisition by placing the two in juxtaposition. (12) A balance-sheet of plus and minus factors may be drawn for this purpose and the relevant factors may be evaluated in terms of price variation as a prudent purchaser would do. (13) The market value of the land under acquisition has thereafter to be deduced by loading the price reflected in the instance taken as norm for plus factors and unloading it for minus factors. (14) The exercise indicated in Clauses (11) to (13) has to be undertaken in a common sense manner as a prudent man of the world of business would do. We may illustrate some such illustrative (not exhaustive) factors ( 12 ) fa24.92 Plus factors Minus factors 1. Smallness of size. 1. Largeness of area. 2. proximity to a road. 2. situation in the interior at a distance from the road. 3. frontage on a road. 3. narrow strip of land with very small frontage compared to depth. 4. nearness to developed area. 4. lower level requiring the depressed portion to be filled up. 5. regular shape. 5. remoteness from developed locality. 6. level vis-a-vis land under acquisition. 6. some special dis- advantageous factor which would deter a purchaser. 7. special value for an owner of adjoining property to whom it may have some very special advantage. (15) The evaluation of these factors of course depends on the facts of each case. There cannot be any hard and fast or rigid rule. Common sense is the best and most reliable guide. For instance, take the factor regarding the size. A building plot of land say 500 to 1000 sq. yds cannot be compared with a large tract or block of land of say 1000 sq. yds or more. Firstly while a smaller plot is within the reach of many, a large block of land will have to be developed by preparing a lay out, carving out ( 13 ) fa24.92 roads, leaving open space, plotting out smaller plots, waiting for purchasers (meanwhile the invested money will be blocked up) and the hazards of an entrepreneur. The factor can be discounted by making a deduction by way of an allowance at an appropriate rate ranging approx. between 20% to 50% to account for land required to be set apart for carving out lands and plotting out small plots. The discounting will to some extent also depend on whether it is a rural area or urban area, whether building activity is picking up, and whether waiting period during which the capital of the entrepreneur would be locked up, will be longer or shorter and the attendant hazards. (16) Every case must be dealt with on its own facts pattern bearing in mind all these factors as a prudent purchaser of land in which position the Judge must place himself. (17) These are general guidelines to be applied with understanding informed with common sense.” . Reference can also be made to Full Bench Judgment of this Court in the matter of State of Maharashtra Vs. Prashram Jagannath Aute, 2007 (5) Mh.L.J. 403. The Full Bench of this Court has concluded in the judgment as under :- ( 14 ) fa24.92 “The Court has to determine the amount of compensation/market value of the land at the date of publication of the notification under section 4 in consonance with the statutory provisions of sections 23 and 24 of the Act read in conjunction with the various judicial pronouncements for arriving at such determination with reference to the facts and circumstances as also evidence led by the parties in each case. It is neither permissible nor proper for the Court to lay down any strait-jacket formula universally applicable to all and acquisition cases at any level of proceedings.” 8. Considering all relevant circumstances and in view of the facts and circumstances of the case, I am of the view that the proper market price in respect of the acquired land ought to have been prescribed at Rs. 15,000/- per acre. 9. The Reference Court has directed payment of interest at the rate of 9% p.a. on the enhanced amount of compensation together with solatium from the date of award i.e. 17.05.1984 till the deposit of amount on enhanced compensation, by the respondent/State in the Court. The ( 15 ) fa24.92 Reference Court has not considered the provisions of Section 28 of the Land Acquisition Act in its proper perspective. The claimant shall be entitled to receive enhanced amount of interest as prescribed under Section 28 of the Act, so also benefits under Section 23 (1A) of the Land Acquisition Act and the amount of solatium on the enhanced amount of compensation awarded in the first appeal. 10. The appeal is thus allowed in the terms stated above with proportionate costs. [R.M. BORDE, J.] snk/2011/JUL11/fa24.92