-1- IN THE HIGH COURT OF BOMBAY AT GOA FIRST APPEAL NO. 32 OF 2004 Vaikunth Gopinath Poi Panandikar, alias Vaikunth P. Palondikar, (since deceased), through his L.R's: (a) Shri Digambar V. Palondikar, major in age, married; and his wife (b) Smt. Vidhya Digamber Palondikar, major in age, married; (c) Shri Manguesh V. Palondikar, major in age, married, and his wife (d) Smt. Maya Manguesh Palondikar, major in age; (e) Smt. Urmila L. Rajadhyaksha, major in age, widow, resident of Palolem, Canacona, Goa. (Deleted) (f) Smt. Vrunda G. Kamat, daughter of Vaikunth P. Palondikar, major in age, married, and her husband (Deleted) (g) Shri Chandrakant A. Kamat, major in age, (Deleted) both residents at 4, Shushrut S.P.T. Hospital Compound, Wadala, Mumbai 400 037; (h) Smt. Usha A. Dhume, major in age, married, and her husband (Deleted) (i) Shri Ashok A. Dhume, major in age; (Deleted) both residents of 'Mangirishkripa', -2- Ganesh Mandir Road, Hindwadi, Belgaum; (j) Smt. Vanita S. Karande, major in age, married; and her husband (Deleted) (k) Shri Suresh V. Karande, major in age, (Deleted) both resident at Mormugao Port Trust, Administrative Office, Head Land, Sada, Vasco da Gama, Goa. …... Appellants V e r s u s 1. The Dy. Collector (Rev.) & L.A.O., Collectorate of South Goa, Revenue Branch, Margao, Goa; and 2. The Executive Engineer, Works Division VI, Public Works Department, Fatorda, Margao, Goa. …... Respondents Mr. S. S. Kakodkar, Advocate for the Appellants. Mr. Amey Kakodkar, Addl. Government Advocate for the Respondents. CORAM: F. M. REIS, J. DATE : 27 th August, 2010. ORAL JUDGMENT The above Appeal challenges the Judgment and Award dated 27th October, 2003, passed by the learned Addl. District Judge, South Goa, Margao, in Land Acquisition Case no. 498/1995, whereby a reference filed by -3- the Appellants under Section 18 of the Land Acquisition Act, was answered in the negative. 2. By a Notification under Section 4 of the Land Acquisition Act, 1894, (hereinafter referred to as the 'said Act'), bearing no.22/176/91-RD dated 30.09.1991, published in the Official Gazette dated 27.02.1992, the land of the Appellants admeasuring an area of 140 square metres from the property surveyed under no. 7/1, was acquired for the construction and black topping of main Betalbatim road via Bagdem, Padriguelem, Village Panchayat of Colva. By an Award dated 27.01.1995, passed under Section 11 of the said Act, the Land Acquisition Officer awarded compensation for the land acquired at the rate of Rs.7/- per square metre. Being dissatisfied with the said Award, the Appellants sought a reference under Section 18 of the said Act for enhancement of compensation and claimed a compensation at the rate of Rs.600/- per square metre besides compensation for the coconut trees of Rs.3000/-. The Reference Court by the impugned Judgment and Award dated 27th October, 2003, dismissed the reference filed by the Appellants. 3. Being aggrieved by the said Judgment, the Appellants have preferred the present Appeal. 4. Shri S. S. Kakodkar, the learned Counsel appearing for the Appellants has assailed the impugned Judgment and submitted that the Reference Court has totally misdirected himself in rejecting the reference filed -4- by the Appellants as there was material on record to establish that the market value of land as on the date of Section 4 Notification was at the minimum rate of Rs.100/- per square metre. He further submitted that the Appellants have produced three Sale Deeds which are located in the vicinity of the acquired land wherein the price mentioned therein was ranging from Rs.100/- to Rs.250/- per square metre, which itself demonstrates that the price offered by the Land Acquisition Officer was inadequate. He further submitted that the Reference Court has rejected the Sale Deeds produced by the Appellants on extraneous grounds essentially on the ground that there was already a traditional access way through the property of the Appellants which disentitle the Appellants from claiming compensation for the land acquired. He further submitted that the Reference Court has erroneously held that the construction of such road would benefit the land of the Appellants when this aspect is irrelevant for the purpose of determining the market value of land as on the date of Section 4 Notification. He further submitted that the Reference Court has totally misinterpreted the evidence on record and erroneously dismissed the reference filed by the Appellants. 5. On the other hand, the learned Addl. Government Advocate appearing for the Respondents has supported the impugned Judgment. He submitted that the Reference Court has rightly come to the conclusion that the Appellants have failed to produce any evidence to substantiate their claim for enhancement of compensation. He submitted that as per the case advanced by the Appellants themselves, they claimed that there was a four metre -5- access touching their property which itself would disclose existence of such access in the property of the Appellant which would disentitle the Appellants from claiming any compensation on account of such encumbrances in the acquired land. He further submitted that the Sale Deeds produced by the Appellants are not comparable with the acquired land and, as such, the Reference Court was justified in not relying upon the said transactions. The learned Addl. Government Advocate has further submitted that there is no case made out by the Appellants for interference in the impugned Judgment. 6. Having heard the learned Counsel and on perusal of the record, the following point arises for my determination in the present Appeal :- 1. Whether the Reference Court is justified in dismissing the reference filed by the Appellants under Section 18 of the Land Acquisition Act ? 7. Aw.1, Digambar Vaikunth Pai Panandikar, has stated in his affidavit that the property surveyed under no. 7/1 admeasures an area of 2725 square metres and that the said land is about 40 metres away from Margao- Colva road and it falls in the settlement zone and in the vicinity of Colva Church, the fish market, Village Panchayat Office, etc. He further stated that Colva beach is at a distance of 700 metres from the acquired land and that the land acquired was levelled land which was suitable for residential as well as commercial purpose. He has produced the Sale Deed dated 28.02.1990, which is at exhibit 18, whereby a plot from the property surveyed under nos. -6- 16/8 of Village Vanelim, Colva, admeasuring an area of 1675 square metres was sold for a sum of Rs.1,67,500/-, which works out to Rs.100/- per square metre. He has further stated that the said property is at a distance of 250 metres from the acquired land and that the said land is off the Margao-Colva road and is also low lying plot. He has also produced a Sale Deed dated 18.02.1993, whereby an area of 2775 square metres of the property surveyed under no. 11/3 was sold for a price of Rs.6,93,750/-, which works out to Rs.250/- per square metre. The said Sale Deed is at exhibit 19. Another Sale Deed produced by the Appellants is dated 28.06.1982, which is in respect of an area of 1341 square metres from the property surveyed under no. 9/1 of Village Colva, wherein the price was fixed at Rs.47/- per square metre. The said Sale Deed is at exhibit 20. He has also produced a report of an expert valuer, Shri Vikas Desai, who has valued the land at the rate of Rs.300/- per square metre. 8. From the sale instances produced by the Appellants, I find that the Sale Deed at exhibit 19 is a post notification Sale Deed and the same cannot be considered when there is material on record with regard to sale instances which are prior to the Notification under Section 4 of the said Act. The Sale Deed at exhibit 20 is also a transaction which has taken place for nearly ten years before the Section 4 Notification which also cannot be considered. The Apex Court in the Judgment reported in (2008) 17 SCC 133, in the case of Sardar Jogendra Singh v. State of U.P., has held at para 12, thus : -7- “12. In ONGC Ltd. v. Rameshbhai Jivanbhai Patel this Court held that in regard to urban and semi-urban areas, in the absence of other acceptable evidence, a cumulative increase of 10% to 15% was permissible with reference to acquisitions in the 1990s. In the decades preceding 1990s, the quantum of increase was considered to be less than 10% per annum. This Court however observed that transactions beyond five years before the acquisition, should be considered with caution and may not always be a reliable guide. Hence the said sale instance at Exhibit 20 cannot form the basis to determine the compensation for the land acquired. The only sale instance remaining for consideration is the Sale Deed which is at exhibit 18. By the said Sale Deed, the price mentioned therein is at the rate of Rs.100/- per square metre. There is no dispute that the said land was a developed plot wherein a mundkarial house was existing. The learned Counsel for the Appellants does not dispute that the said plot was a developed plot but, according to him, there was no formal sanction granted by the statutory authorities for such development. But, however, there is no dispute that the said Sale Deed property was located adjoining a public road towards the western side. The said land was also fit for construction purpose as, admittedly, there was a structure already existing in the said land. Considering the said facts, the said sale instance can form a basis to determine the market value of the land acquired after suitable deductions. The Apex Court in 2010 (1) S.C.C. 444 in the case of Subh Ram & Ors. vs. State of Haryana and anr. has held at para 12, 13, 14 and 15 thus: -8- “12. In a standard layout with plots measuring say 2500 sq ft (50' x 50') each, to provide road access to each plot, it will be necessary to provide a road after every two rows of plots. If the depth of each plot is 50', and if the road width is 25 ft, then for every two strips of plots, there will have to be a strip of road of 25 ft. This means a minimum of 25% of the total land area will be utilized for roads. A typical layout will also have cross-roads, and areas earmarked for park, and/or community areas. Consequently non-saleable area (area which cannot be sold as plots) would be around 30% to 40% of the total area.” 13. Therefore, in the hypothetical layout method of determination of market value, as a first step, the areas that will be used up for roads, drains, parks/playgrounds and community areas, will have to be excluded from the total extent of the acquired land. The standard deduction in this behalf is one-third (33%). 14. But merely deducting the areas required for roads, drains, parks and community areas, will not convert a large tract of agricultural or undeveloped land into a developed residential layout. For that, considerable financial outlay has to be made. The land will have to be levelled. The land will have to be converted from agricultural use to non-agricultural residential use by paying necessary fees/fine to the Revenue/development authorities. Then the roads will have to be asphalted or concreted. Drains will have to -9- be dug and lined with reinforced cement concrete or stone, for drainage of rainwater. Electricity, water, and sewage lines will have to be laid. Deposits will have to be made to the authorities dealing with electricity, water and sewage removal. The development will also involve the service of surveyors, engineers and developers. All these involve considerable expenditure. Further, as there will be a time gap between the expenditure for development and the actual sale of plots, the cost of development will also have an element of interest on investment. The developer who undertakes the development and invests the monies for development would also expect a reasonable profit when the plots are sold. All these expenditure and factors are standardised into another one-third (33%) deduction towards expenses of development. 15. Thus, if the valuation of a large extent of agricultural or undeveloped land is to be based on the sale price of a small developed plot in a private layout, then the standard deductions should be one- third (for roads, etc.) plus one-third (for expenditure of development), in all two-thirds (or 67%), as “development cost” from the value of small plot. The percentage of deduction may however vary between 20% to 75% depending on several circumstances (see Lal Chand v. Union of India, paras 8 and 9 for illustrations of such circumstances).” As there is no precise material on record produced by the Appellants to fix the actual deductions to be effective from the said price of -10- Rs.100/-, applying the principles as envisaged in the said Judgment of the Apex Court, I find that the deduction of 67 percent would be justified in the circumstances of the case. 9. The Sale Deed at exhibit 19, was executed in the year 1990 and the Notification under Section 4 in the present case was published in the year 1992. There is no dispute that the said land is located at Colva at a distance of 700 metres from Colva beach. Considering the said facts, I find that the appropriate escalation would be 10% per annum on cumulative basis. The amount works out to Rs.121/- per square metre. After deductions of 67 percent on account of development charges, the amount is rounded up to Rs.40/- per square metre. I, accordingly determine the market value of land as on the date of Section 4 Notification at the rate of Rs.40/- per square metre. 10. The Reference Court has erred in considering that the construction of the said road would benefit the land of the Appellants whilst deciding the reference filed by the Appellants. Such considerations are irrelevant for the purpose of determining the compensation in terms of Section 23 of the said Act. The Reference Court has also erroneously considered the existence of a traditional access when there was no evidence on record to substantiate the fact that there exists a traditional access. There was no declaration produced from any Court to that effect nor the Survey Records produced by the Appellants depicted that there was any existence of such traditional access through the property of the Appellants. No person was -11- examined who was claiming any such right through the property of the Appellant. 11. This Court in the Judgment reported in 1993(1) B.C.R., 465 in the case of Macario Antonio Francisco de Cunha and another vs. Alex Fred D' Souza & Ors., has held at para 15, thus : “15. … What is however interesting is that the observation made in relation to the open lands in this country cannot be overlooked which are to this effect : In a Country like India where the lands are usually unenclosed, before a right of easement is declared to be established over them, the Courts, in my opinion, must require strict proof that the plaintiff has satisfied the requirement of the section. “Referring to the decision in another case (Khoda Buksh v. Rajuddin), what is extracted cannot be less overemphasized.....” having regard to the habits of the people of this country, I do not think that it would be right to draw the same inference from mere user that would be proper and legitimate in a case arising in England. The question in always a question of fact and the propriety of the rule that the presumption from user should be that it is as of right, must depend upon the circumstances not only of each particular case but also of each particular country, regard being had to the habits of the people of that country.” 12. Merely because people are allowed to pass through the properties by itself cannot infer that the said user is as of right for that purpose -12- claiming an easementary right. The provisions of the Easements Act clearly provides the manner in which such rights are determined. These aspects, in any event, are not relevant for dismissing a reference for enhancement of compensation under Section 18 of the said Act nor discarding the sale instances filed by the Appellant. In case such rights are in fact established in accordance with law, it may be a material for the purpose of making a deduction for determining the market value of the land acquired. I find that the Reference Court has totally misdirected itself in rejecting the reference of the Appellants on that count, in toto. 13. The Apex Court in the Judgment reported in 2009(10) S.C.C. 686, in the case of State of Goa v. Gopal Baburao Gaudo, it has been held at para 5 and 7 as under : “5. The contention that a land adjoining the highway should be treated as having no development potential (and therefore as land without much value except as ordinary agricultural land), while considering the lands to its rear which are farther away from the road, or other adjoining lands of the same extent, but having more depth (so as to extend beyond the 40 m margin) as having potential for development, is illogical and cannot be accepted. 6. … 7. Therefore, determination of market value of the acquired land with reference to the value of comparable land cannot be faulted. -13- As such, even land that comes within the road widening area cannot by itself be considered as having no development potential. 14. As far as the claim of the Appellants towards the coconut trees, I find that there was no material on record to claim on that count. The Reference Court has rightly rejected the claim of the Appellants in that respect. As such, the impugned Judgment cannot be sustained and deserves to be quashed and set aside and the market value of the land acquired is to be fixed at the rate of Rs.40/- per square metre. The point for determination is answered accordingly. 15. In view of the above, I pass the following : ORDER (i) The above Appeal is partly allowed. (ii) The impugned Judgment and Award dated 27.10.2003, is quashed and set aside. (iii) The market value of the land is fixed at the rate of Rs. 40/- per square metre for the land acquired. Needless to say, the Appellants would be entitled to statutory benefits under Section 23(1)(A) of the Act, Section 23(2) and Section 28 of the said Act in accordance with law. (iv)The Reference Court is directed to compute the amount payable by the Respondents accordingly -14- within three months after hearing both the parties. (v) The Respondents are directed to deposit the amount so determined in the Reference Court, within three months thereafter. (vi)The Appeal is disposed of accordingly with no orders as to costs. (vii) Decree accordingly. F. M. REIS, J. arp/*