IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE PIUS C.KURIAKOSE & THE HONOURABLE MR. JUSTICE K.SURENDRA MOHAN FRIDAY, THE 11TH DECEMBER 2009 / 20TH AGRAHAYANA 1931 LA.App..No. 682 of 2004()CROSS OBJECTION NO.11/2005 --------------------------------------------------------------------------------- LAR.32/1999 of SUB COURT, MUVATTUPUZHA .................... APPELLANT(S): ADDL.2ND RESPONDENT: ------------------------ MUVATTUPUZHA MUNICIPALITY, MUVATTUPUZHA, REP. BY ITS SECRETARY. BY ADS.MR.V.M.KURIAN MR.MATHEW B. KURIAN MR.A.V.THOMAS MR.K.T.THOMAS RESPONDENT(S): CLAIMANTS & RESPONDENT NO.1: -------------------------- 1. VARKEY, S/O. KURUVILLA BABU, ERANADAKATHOTTATHIL, KADATHY, VELLOORKUNNAM, MUVATTUPUZHA. 2. MOLLY, W/O. VARKEY, ERANADAKATHOTTATHIL, KADATHY, MUVATTUPUZHA. 3. STATE OF KERALA. R1 & R2 BY MR.T.P.KELU NAMBIAR, SENIOR ADVOCATE R1 & R2 BY ADVS MR . P.G.RAJAGOPALAN, SRI.M.GOPIKRISHNAN NAMBIAR, SMT.T.RESMI DAMODARAN R3 BY GOVERNMENT PLEADER MR.P.K.BABU MR.A.S.SHAMMY RAJ FOR ADV.COMMSR. THIS LAND ACQUISITION APPEAL HAVING BEEN FINALLY HEARD ON 08/09/2009, ALONG WITH ALONG WITH LAA. NO.175 OF 2004 AND CONNECTED CASES THE COURT ON 11/12/2009 DELIVERED THE FOLLOWING: ORDER ON IA. NO.3211/2004 IN LAA. NO. 682/2004 DISMISSED 11/12/2009 SD/- PIUS C.KURIAKOSE, JUDGE SD/- K.SURENDRA MOHAN, JUDGE TRUE COPY P.A. TO JUDGE tss PIUS C.KURIAKOSE & K.SURENDRA MOHAN, JJ. ------------------------------------------------------------------------------------ L.A.A. NOS: 682/04 & CO11/05, 175/04 & CO9/05,750/04, 718/04 &CO 33/05, 763/04, 630/04& CO 38/05, 628/04, 678/05 & CO 118/05, 735/04, 955/04,141/05 and 629/04 & CO 42/05 ----------------------------------------------------------------------------------- Dated this the 11th December, 2009. JUDGMENT SURENDRA MOHAN, An extent of 50.91 Ares (125.74 cents) of land in Velloorkunnam Village of Muvattupuzha Taluk comprised in different survey numbers was acquired by the State, on the requisitioning of the Muvattupuzha Municipality, for the expansion of the Municipal Stadium and formation of a ring road around the stadium. The Section 4(1) notification is dated 6.12.1996. The Land Acquisition Officer verified various documents relating to similar lands executed during the relevant period and fixed the land value of the properties. For the purpose, he categorized the lands into two categories, those having road access as the first category and those without road access as the second category. Relying on sale deed No: 4059/1994 of Muvattupuzha Sub Registry the Land Acquisition Officer awarded land value at the rate of Rs.17,000/- per Are (Rs.6,880 per cent) to the lands in category I and Rs.15,400/- per Are (6,232 per cent) to the lands in category II, LAA 682/04 etc. 2 those without road access. Dissatisfied with the land value awarded by the Land Acquisition Officer the claimants sought a reference to the Court and thus the matter was referred to the Sub Court, Muvattupuzha, for considering the claim for enhanced compensation made by the claimants. 2. Before the Reference Court the claimants adduced evidence in support of their claims. The evidence in the case consists of the oral evidence of A.Ws 1 to 5 and Exts. A1 to A9 documents on the side of the claimants. On the side of the respondents, Exts. R1 to R17 documents were marked and R.W.1 was examined as a witness. Exts. C1 commission report and C1(a) plan have been marked as Court Exhibits. 3. After an evaluation of the evidence on record, the Sub Court, Muvattupuzha as per a common judgment dated 31.10.2003 enhanced and fixed the land value of the acquired properties at a uniform rate of Rs.60,000/- per Are (Rs.24,282 per cent). The Court thus did away with the categorization adopted by the Land Acquisition Officer. The Reference Court took note of the fact that the acquired properties were all lying in close proximity to LAA 682/04 etc. 3 the properties covered by Exts. A1 to A4, A7 & A8 sale deeds. Though the records described the properties as wet lands, the Reference Court, on the basis of the report of the Advocate Commissioner found that the lands were dry lands with the only disadvantage that they were lying at levels substantially lower than the road. The lands were also found to be barren. However, the properties were found to enjoy locational advantages by virtue of their proximity to all the important establishments in the Muvattupuzha Municipality. The Muvattupuzha Municipality which is the Requisitioning Authority has preferred appeals against the common judgment of the Reference Court contending that the award was excessive. The Government has also preferred separate appeals against the said judgment. The claimants have preferred cross objections contending that the enhanced land value granted by the reference Court also did not reflect the real market value of the acquired properties. They have claimed land value at the rate of Rs.2,00,000/- per cent. All the appeals and cross objections are considered together for the reason that the questions that arise for determination are all same. LAA 682/04 etc. 4 4. As per order dated 31.3.2009 in I.A.1219 of 2009 in L.A.A.NO: 682 of 2004 an Advocate Commissioner was appointed from this Court to make a local inspection of the properties acquired in these appeals and to make a comparison of the said properties with the properties acquired as per Exts. A7 and A8 proceedings. Accordingly an Advocate Commissioner conducted a local inspection on 6.4.2009 and has submitted a report, supported by rough sketch of the properties that were compared. The said Commission report and the plan are received in evidence and are marked as Exts. C2 and C2(a) respectively. Exts. C2 and C2(a) also endorse the locational importance of the acquired properties. Nevertheless, it is reported that the acquired properties are lying at substantially lower levels than the main road. The properties acquired as per Exts. A7 and A8 are also reported to be not similar to the acquired properties. Exts. A7 and A8 properties are found by the Commissioner to be enjoying better advantages than the acquired properties. 5. The learned Senior Govt. Pleader as well as the counsel for the Municipality attacked the findings of the Reference Court LAA 682/04 etc. 5 contending that the Reference Court seriously erred in discarding the categorization adopted by the Land Acquisition Officer. It is pointed out that the lands acquired are all ‘Nilam’ or paddy fields according to the records. They are all properties which remain submerged during rainy season. According to the counsel they are lying barren only for the reason that paddy cultivation has been discontinued by the owners during the recent past. It is contended that the properties being 10 to 12 ft. below the road level did not possess any road access at all though they were by the side of the road. Exts.A1 and A2 sale deeds are attacked by the counsel pointing out that they were both post notification documents. The properties covered by Exts. A3 & A4 sale deeds according to the counsel were not comparable to the acquired property, since they were both garden lands facing the National Highway. According to the counsel the sale deed that was the subject matter of Ext.A6 order of this Court in C.M.A.5/2000 was not produced before the reference Court. Nor was the agreement for sale produced. Therefore, the counsel contended that the Reference Court went wrong in placing reliance on the said document. With respect to LAA 682/04 etc. 6 Exts. A7 and A8 properties, the contention is that they related to small bits of land that were acquired by the Municipality for constructing the TVS-Keecheripady road . The said lands were located 500 mtrs. away from the acquired property and were not comparable properties for the reason that the said properties were facing the M.C.Road and located 500 mtrs. away. The counsel, therefore, contended that there was no reliable evidence available in the case for granting enhanced land value for the acquired properties. Since the burden of proving that they were entitled to enhanced land value was entirely on the claimants, they were not entitled to any enhancement for the reason that they had not discharged the said burden by adducing any acceptable evidence. 6. The counsel for the claimants on the other hand contended that the land value awarded by the Reference Court was too low. The Reference Court failed to take into account the clear and unambiguous data that were available from the evidence produced in the case to show that the land value was at least Rs.60,000/- per cent. According to the counsel, Exts.A1 and A2 sale deeds were documents by which the Muvattupuzha LAA 682/04 etc. 7 Municipality itself had purchased properties for a consideration of Rs.50,000/- per cent. The properties according to the claimants are only 300 mtrs. away from the acquired property. Both the properties are located in the same village. The properties covered by Exts. A3 and A4 sale deeds relate to a property adjoining the acquired land. In the said documents also the consideration shown is Rs.50,000/- per cent. Exts. A7 and A8 are proceedings of the Land Acquisition Officer in LAC No: 17/1998 and connected cases. The properties involved in the said cases are 425 Mtrs. away from the acquired property. They were acquired for the formation of a new road. The land value awarded by the Land Acquisition Officer for the acquired land was Rs.1,00,576/- per Are which corresponds to Rs.40,072/- per cent. It is pointed out that the Section 4(1) notification for the said acquisition is also dated 6.12.1996, as in the present case. It is further pointed out that as per Ext.A9 sale deed dated 5.11.1993 the father of the claimant in LAR 33/1999 had purchased an item of property at the rate of Rs.20,000/- per cent. According to the counsel, the said property is in the very same survey number as the acquired property. Since Ext.A9 LAA 682/04 etc. 8 property was part of the acquired property there is no justification for discarding the said document. Therefore, it is contended that the land value may be fixed for the acquired properties by adding escalation at the rate of 15% per annum from the date of Ext.A9 sale deed till the date of the Section 4(1) notification in the present case. The decisions reported in State of Kerala v. Jose Simon {2009(1) KLT 760} and Atma Singh v. State of Haryana {(2008) 2 SCC 568} are also pressed into service. 7. We have heard Mr. V.M.Kurian, Advocate for the appellant- Municipality, Mr. Basant Balaji, the Senior Govt. Pleader and Mr. Gopikrishnan Nambiar, counsel for the claimants-cross objectors. We have gone through the records of the case and the evidence on record. We have also given anxious consideration to the contentions advanced by the parties. 8. At the instance of the claimants an Advocate Commissioner had been deputed by the Reference Court to inspect the acquired properties. Accordingly he had inspected the properties and his report and plan are marked as Exts.C1 & C1(a) by the Court. The Advocate Commissioner has reported that the LAA 682/04 etc. 9 properties under acquistion are all located in the heart of Muvattupuzha Municipal town. The proximity of the lands to the important commercial, Government and non-governmental establishments indicate that the properties are all situate in a commercially important locality. Ext.C1 commission report has referred in detail to the various commercial and other important establishments near the acquired properties. The Velloorkunnam Village Office, Temple, Town U.P. School, Market, European Economic Market, Courts, Office of the Revenue Divisional Officer, Banks, Homoeo Hospital etc. are all located close to the acquired lands. The above aspects are endorsed by Ext. C2 report also. Therefore, the Commercial importance of the acquired lands is beyond dispute. Considering the locational importance of the lands, it is clear that the lands were valuable assets, capable of commercial exploitation by the owners thereof. However, the commission reports also show that the acquired properties are all lying at about 10-12 ft. lower than the road level. Therefore, the counsel for the Municipality has pointed out that commercial exploitation of the acquired lands would be possible only after LAA 682/04 etc. 10 properly developing them into commercially attractive lands. Any such development would involve considerable expenditure, it is pointed out. According to the counsel, in its present state, the land was not capable of commanding the same commercial value that other developed lands were capable of commanding. It is also pointed out that the sale deeds relied on by the claimants all relate to fully developed lands which cannot be compared with the acquired properties. It is true that the acquired lands are lying at levels substantially lower from the road level. Therefore, the lands certainly would not fetch the same market value that other level lands would be capable of fetching. However, it is clear from the evidence on record that the acquired lands are situate in a commercially important locality in Muvattupuzha town. Therefore, the commercial importance of the acquired properties also cannot be ignored for the sole reason that they are lying at a lower level from the road. 9. The claimants rely on Exts.A1 and A2 sale deeds by which two items of properties have been purchased by the Muvattupuzha Municipality. As per Ext.A1 sale deed, 7.165 cents and 395 sq.links LAA 682/04 etc. 11 of land have been purchased. As per Ext.A2 an extent of 2.61 cents of land has been purchased. The properties have been purchased at the rate of Rs.50,000/- per cent. The lands are situate in same village and is about 300 mtrs. away from the acquired land. The sale deeds have been proved by examining A.W.2 who was the then Secretary of the Municipality. The Advocate Commissioner has made a comparison of the properties covered by the above sale deeds with the acquired properties. It is seen from the report of the Advocate Commissioner that the properties covered by Exts.A1 and A2 are situate adjacent to the N.H.49. The said lands were purchased for the formation of the byepass road. The properties covered by Exts.A1 and A2 are small extents that were acquired for opening the byepass road. They are also fully developed garden lands which are by the side of the main road. Therefore, the value given in Exts.A1 and A2 cannot be accepted as such. Further, it is to be noticed that Exts.A1 and A2 are post notification documents, though only by a few months. 10. Exts.A3 and A4 documents are two other sale deeds relating to nearby properties. The value shown in the said sale LAA 682/04 etc. 12 deeds are Rs.44,444/- and Rs.43,478/- per cent respectively. However, the said documents show that the properties covered by the said deeds were garden lands with buildings therein. Ext. A6 is an order of this Court in C.M.A. 5/2000 which related to an agreement for sale of an item of immovable property in the same locality. The value of the property in the agreement for sale appears to be Rs.2,50,000/- per cent. However, the said agreement has not been produced in Court. Exts. A7 & A8 relates to proceedings for acquisition of small bits of property for the construction of the TVS-Keecheripady road. The land value awarded is Rs.40,702 per cent, it appears that the acquired land in the said case was dry lands. The properties under acquisition in the said case are only 500 mtrs. away from the acquired properties in these cases. The Section 4(1) notification in the said case is also 6.12.1996. Another document that is pressed into service by the claimants is Ext. A9 sale deed dated 5.11.1993 by which the father of the claimant in LAR 33/99 has purchased an item of property at the rate of Rs.20,000/- per cent. It is the contention of the claimants that in spite of the unambiguous data available from the LAA 682/04 etc. 13 above documents, the Reference Court seriously went wrong in not accepting the same and awarding land value at least at the rate of Rs.60,000/- per cent. 11. In considering the question as to what is the correct market value of the acquired lands, it is to be borne in mind that, what has to be ascertained is the price that would be offered by a willing buyer to a willing seller. For the purpose of ascertaining the same, various principles have been laid down by the Apex Court as well as our Court in a number of cases. In Atma Singh's case (supra) at page 572 (paragraph 4), the Apex Court has summed up the nature of the enquiry required in the following words:- “The expression 'market value' has been the subject-matter of consideration by this Court in several cases. The market value is the price that a willing purchaser would pay to a willing seller for the property having due regard to its existing condition with all its existing advantages and its potential possibilities when led out in most advantageous manner excluding any advantage due to carrying out of the scheme for which the property is compulsorily acquired. In considering market value disinclination of the vendor to part with his land and the urgent necessity of the purchaser to LAA 682/04 etc. 14 buy should be disregarded. The guiding star would be the conduct of hypothetical willing vendor who would offer the land and a purchaser in normal human conduct would be willing to buy as a prudent man in normal market conditions but not an anxious dealing at arm's length nor facade of sale nor fictitious sale brought about in quick succession or otherwise to inflate the market value. The determination of market value is the prediction of an economic event viz., a price outcome of hypothetical sale expressed in terms of probabilities.” It is further laid down in the said decision that for ascertaining the market value of the land, the potentiality of the acquired land should also be taken into consideration. By potentiality what is meant is the capacity of transforming into or being developed into a substantial asset or property of much higher value. Therefore, apart from the actual advantages enjoyed by the property, it is also necessary to bear in mind and to take into consideration the capacity of the land to be converted into or being developed into a much more valuable asset. Viewed in the above prospective it is clear that though the properties are at present lying at levels much lower than the road, their location in close proximity to the main LAA 682/04 etc. 15 road gives them the potential of being developed into very valuable assets. Therefore, the locational advantages enjoyed by the properties are further enhanced by the potential for development which the acquired properties had. Though the properties are paddy fields, according to the Revenue records the Advocate Commissioner has reported that the lands were dry lands lying barren with no cultivation or improvements therein. The presence of commercial establishments, Banks, Government institutions, Schools and financial institutions clearly evidence the potential of the land for development, which has to be considered as an input while determining the market value of the acquired properties. However, the above considerations do not appear to have weighed much, with the Reference Court while fixing the land value of the acquired properties. 12. The Land Acquisition Officer had categorised the lands into two. Category I with road access was given a higher value of Rs.17,000/- per Are while the lands in Category II without road access was given a lesser value of Rs.15,400/- per Are. However, the Reference Court has discarded the categorisation that was LAA 682/04 etc. 16 adopted, without assigning any reason. It cannot be disputed that lands with road access enjoy a definite advantage over similar lands that do not have road access. Therefore, lands with road access are certainly more valuable than similar lands without road access. Hence the Reference Court went wrong in discarding the categorisation and granting the same land value for lands with road access and those without such advantage. For the above reasons, we hold that the categorisation adopted by the Land Acquistion Officer was correct and therefore, we treat the three cases in which the lands had road access a little differently from those without road access. 13. A perusal of the documents Exts. A1, A2, A3, A4, A6, A7 & A8 show higher value than what has been granted by the Reference Court. However, the value shown in the said documents cannot be accepted as such for the reason that they relate to pucca garden lands. The properties covered by Exts. A1 and A2 relates to small bits of land. The same is the case with that of Exts. A7 & A8. But, the locational advantages enjoyed by the acquired property cannot be lost sight of. At the same time it is to be borne LAA 682/04 etc. 17 in mind that the acquired lands are lying at substantially lower levels from the adjacent road. Nevertheless, the potential of the properties for development must also be taken note of. Considering all the above aspects, we feel that the correct market value of the acquired lands can be fixed at Rs.68,000/- per Are for the lands in Category I (with road access). The lands in category II are certainly at a disadvantage for want of road access and, therefore, we fix the disadvantage for such lands without road access at 10% of the value of the lands with road access. Accordingly, the market value of the lands in category II works out to Rs.61,200/- per Are. 14. The result of the above discussion is that LAA Nos: 175/2004, 750/2004, 718/2004, 763/2004, 629/2009, 141/2005, 630/2004, 955/2004, 682/2004, 628/2004, 678/2004 and 735/2004 are dismissed. Cross objection Nos: 9/2005, 33/2005, 42/2005, 38/2005, 11/2005 and 118/2005 are allowed. The market value of the lands that form the subject matter of Cross Objection Nos: 9/2005, 11/2005 and 118/2005 are fixed at Rs.68,000/- per Are while the market value of the lands that form LAA 682/04 etc. 18 the subject matter of Cross Objection Nos: 33/2005, 42/2005 and 38/2005 are fixed at Rs.61,200/- per Are. It is made clear that the claimants shall be entitled to the statutory benefits under Sections 23(2), 23(1-A) and 28 of the Land Acquisition Act in respect of the enhanced compensation. In the circumstances of the case there will be no order as to costs. PIUS C.KURIAKOSE Judge K. SURENDRA MOHAN Judge jj PIUS C.KURIAKOSE & K.SURENDRA MOHAN, JJ. --------------------------------------- L.A.A.NO: --------------------------------------- JUDGMENT Dated: