1 FA.1033.03.sxw IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION FIRST APPEAL NO.1033 OF 2003 1. Anant Vishnu Vartak, Age 67 years, Occ.Business, Resident of 520, Shaniwar Peth, Pune-411 030. 2. Smt. Usha Sharadchandra Vartak, Age 72 yrs., Occ. Household, Resident of 259, Shaniwar Peth, Pune- 411 030. 3. Arvind Sharadchandra Vartak, Age 54 yrs., Occu. Business, Resident of 259, Shaniwar Peth, Pune-411 030. 4. Ramesh Sharadchandra Vartak, Age 50 yrs., Occu. Business, Resident of 259, Shaniwar Peth, Pune-411 030. 5. Miss Suvarna Sharadchandra Vartak, Age 37 yrs., Occu. Student, Resident of 259, Shaniwar Peth, Pune-411 030. Nos.2 to 5 heirs and legal representatives of Shri Sharadchandra Vishnu Vartak. 6.Smt.Leelabai Vasant Vartak, ...Appellants Age 74 yrs., Occu.Business, (No.1 & 6 Ori.Claimants, Resident of 520, Shaniwar Peth, Nos.2 to 5 – heirs & L.Rs. Pune – 400 030. of Claimant No.2) Versus 2 FA.1033.03.sxw 1. Special Land Acquisition Officer, (Spl) Unit No.1, Pimpri, Pune-411 018. 2. Pimpri-Chinchwad Municipal Corporation, by its Commissioner, having its office at Pimpri, Pune-411 018. 3. State of Maharashtra, ...Respondents through Collector, Pune. (Ori.Opponents) WITH FIRST APPEAL NO.26 OF 1996 Shri Gajanan Shridhar Pundale, since deceased through legal heirs and representatives: Shri Pramod Gajanan Pundale, aged 52 years, residing at 497 Narayan Peth, Pune-411 030 (Amendment carried out as per Court’s order dated 9.2.2009 ...Appellant passed in Civil Application No.636/2009) (Ori.Claimant-1) Versus The State of Maharashtra, at the instance of the Special Land Acquisition Officer, Special Unit No.1, Pimpri, Pune-411 018. 2.Pimpri Chinchwad Municipal Corporation, ...Respondents Pimpri, Pune-411 018. (Ori.Opponents) Notice to be served on Pimpri Chinchwad Municipal Corporation, Pune 411 018. 3 FA.1033.03.sxw 3.Shri Madhavrao Marutrao Dhadge, since deceased through his heirs and legal representatives : (a) Shri Pravin Madhavrao Dhadge, aged about 43 years, occupation Business. (b) Shri Manoj Madhavrao Dhadge, ...Respondents aged about 40 years, occupation Business. (Ori.Opponents) Both residing at Flat No.173, Budhwar Peth, Pune-411 002. ...... Mr.P.S.Dani with Mr.Devidas H.Keluskar for Appellants in FA/1033/2003. Mr.S.M.Gorwadkar with Mr.S.M.Sabrad for Appellants in FA/26/1996. Mrs.G.P.Mulekar, A.G.P. for Respondent No.1 in both Appeals. Mr.P.K.Dhakephalkar with Mr.S.R.Ganbavale for Respondent No.2 in both Appeals. Mr.P.B.Shah for Respondents 3(a) & 3(b). ...... CORAM:- A.M.KHANWILKAR AND A.A.SAYED, JJ. DATED:- JULY 23, 2010. P.C. 1. Both these Appeals can be disposed of by common Judgment, as the controversy to be addressed is emanating from the common Notification issued to acquire the subject land. The Appeal No.1033 of 2003 is filed by the one set of claimants who had held land admeasuring 8311.37 sq.mtrs. 4 FA.1033.03.sxw known as `Vartaks'. The Appeal No.26 of 1996 has been filed by the other set of claimants in relation to land admeasuring 9511.38 sq.mtrs., known as `Pundales'. Their land was in possession of the occupants/tenants known as `Dhadges'. 2. The Development Plan for the City of the then Pimpri Chinchwad Municipal Council was sanctioned on 17th March 1978. As per the said sanctioned Development Plan, the land in question bearing CTS No. 3608(p) (Plot No.195p) of Village Chinchwad was shown as reserved for childrens' playground. The said land is admeasuring 17822.75 sq.mtrs. As aforesaid, part of the said land is owned by Vartaks admeasuring about 8311.37 sq.mtrs. and the other part by Pundales admeasuring 9511.38 sq.mtrs. The land owned by Pundales was in occupation of tenants Dhadges. The then Chief Officer, Pimpri Chinchwad Municipal Council requested the Collector of Pune to initiate land acquisition proceedings in respect of the above said land admeasuring 17822.75 sq.mrs. Consequent to the said request, Notification under Section 126 of the Maharashtra Regional Town Planning Act, 1966 r/w Section 6 of the Land Acquisition Act, 1894 came to be issued on 19th January 1984. Thereafter, inquiry regarding acquisition of the subject land was commenced. In the said 5 FA.1033.03.sxw inquiry, the claimants appeared and demanded compensation for the said land at the rate of Rs.269/- per sq.mtr. In support of their claim, they relied on sale instances pertaining to plots in the nearby localities. The Land Acquisition Officer after considering the evidence in support of the claim and the relevant sale instances which, in his opinion, were comparable sale instances, proceeded to determine fair market price of the said land vide award dated 12th May 1986. In the said Award, reference is made to the two sale instances relied upon by Vartaks - one of the claimants. The first was pertaining to Survey No.195/196, Plot No.61, admeasuring 320 sq.mtrs. The said land was sold for Rs.30,000/- i.e. at Rs.93.75 per sq.mtr. on 31st August 1983. The second instance pertains to Survey No.195/1 bearing Plot No.58, admeasuring 294 sq.mtrs. This land was sold for Rs. 30,000/- at the rate of Rs.102 per sq.mtr. on 3rd August 1983. While considering the valuation of the property, the SLAO has also adverted to other six sale instances, namely:- (i) S.No.195-196 of Chinchwad, Plot No.67 admeasuring (1200 sq.ft.) 308 Sq.Mtrs. has been sold on 15-3-79 at the rate of Rs.32.46 per sq.mtrs. (ii)S.No.164-165 of Chinchwad Plot No. admeasuring 464.68 Sq.mtrs. has been sold on 16-11-81 at the rate of Rs.26.90 per sq.mtrs. 6 FA.1033.03.sxw (iii) S.No.195-196, plot No.155 having an area of (3000 sq.ft.) 280.67 Sq.mtrs. was sold on 1-4-82 at the rate of 61-85 per sq.mtrs. (iv) S.No.195-196 plot No.57 having an area of (2046 sq.ft.) 194 Sq.Mtrs. was sold on 10-6-83 at the rate of Rs.82/- per sq.mtr. (v) S.No.195-196 Plot No.87 admeasuring 195 Sq.Mtrs. (2046 sq.ft.) was sold on at the rate of Rs.82/- per sq.mtr. on 31-12-83. (vi) S.No.195-196 plot No.99 admeasuring 195 Sq.Mtrs. (2046 Sq.ft.) was sold on 14-9-84 at the rate of Rs.87/- per sq.mtr. 3. After having adverted to all these sale instances, the SLAO proceeded to hold that the comparable sale instances were building plots and forming part of sanctioned layouts having roads and other facilities. Besides, the area was of small size ranging between 195 to 300 sq.mtrs. Whereas, the area under acquisition was 17822.75 sq.mtrs. The SLAO then applied hypothetical plotting scheme to arrive at fair market price of the land under consideration. Considering the above mentioned sale instances it was found that the sale price was ranging between Rs.32.46 to Rs.87/- per sq.mtr. during the relevant period. The Agreements in respect of the said sale were generally executed between span of 1½ to two years prior to the date of acquisition. Taking overall view of the matter, the SLAO assumed 7 FA.1033.03.sxw the hypothetical plotting scheme rate in respect of the land under consideration at Rs.100/- per sq.mtr. on the net building plot. After having arrived at the said opinion, he then proceeded to provide for deduction towards road and open space of about 25% of the total plot area. On providing the said deduction, the SLAO arrived at the net plot saleable area as 13367 sq.mtrs. only (i.e. 17822.75 - 4435.68). The SLAO then applied the assumed fair market price in respect of the said land at Rs. 100/- per sq.mtr. to the said net saleable plot area and computed the total market value payable in respect of the said land at Rs.12,36,707/-. Thereafter the SLAO provided for further deduction at the rate of 7% per annum on the assumption that for selling the 50 plots of 250 sq.mtrs. to be formed out of the land in question, it would take at least two years to complete the sale of the said plot. In other words, deduction towards deferred value has been provided at 7% per annum period on two years by applying the ratio of 0.8734. After providing for the said deduction, the deferred value of the plot in question has been arrived at Rs.11,67,479.90. The SLAO then provided for further deduction towards cost of development of road, water supply and electricity, etc. of lump sum amount of Rs.1,50,000/-; towards Architect's fees, legal charges, etc. at 5% being Rs.58,374/-; and further Developer’s profit at 15% of the gross proceeds being Rs.2,00,506/-. This 8 FA.1033.03.sxw additional deductions are provided for the entire plot, the aggregate amount whereof works out at Rs.4,08,880.05. After providing for the above said deductions, the SLAO arrived at the net fair market value of the land in question and the overall rate thereof at Rs.43/- per sq.mtr. 4. The SLAO then proceeded to examine the claim of Pundales in respect of land owned by them admeasuring 9511.38 sq.mtrs. It is noticed that the said land was encroached upon by unauthorised hutment dwellers, about 340 in number. Besides, Dhadges claimed to be in occupation of the said land as tenants. Considering the said encumbrances, the SLAO provided for deduction of further amount of Rs.8/- per sq.mtr. in relation to the land owned by Pundales. On that basis, the fair market price of the land owned by Pundales has been arrived at Rs.35/- per sq.mtr. Insofar as the land belonging to Pundales, the SLAO has recorded the joint statement of the Pundales and Dhadges that they would apportion the compensation amount in the ratio of 60 : 40. On the basis of the said statement, the amount payable to the land belonging to Pundales has been apportioned between the Pundales and Dhadges. The SLAO, however, has declined to grant any compensation to the hutment dwellers on the finding that the permanent structures and other temporary structures standing on the subject 9 FA.1033.03.sxw land were unauthorised, for which reason, they were not entitled to any compensation. On the above basis, the award came to be passed by the SLAO. On arriving at the fair market value of the land held by the respective owners, the SLAO then provided for 12% interest on the market value from the date of Section 6 Notification to the date of declaration of award i.e. 12th May 1986. 5. This common award was put in issue by the claimants by instituting Reference under Section 18 of the Land Acquisition Act. The Reference filed by Pundales and Dhadges was numbered as Reference No.230/1986. Whereas, the Reference instituted by Vartaks was numbered as Land Reference No.313 of 1987. Both these land References were tried separately. 6. Insofar as the Reference instituted by the owners Pundales and occupants/tenants Dhadges, the claimants not only produced documentary evidence but also examined witnesses in support of their claim. The claimants examined in all five witnesses. Whereas, the State examined in all four witnesses. The Reference Court on analysing the said evidence, in the first place, rejected the plea of the State that the Reference filed by the 10 FA.1033.03.sxw claimants was barred by limitation. It then proceeded to reject the plea of the State to give nominal compensation of only Rs.1/- to the owners as vacant possession of the land could not be obtained as the land was in possession of the unauthorised occupants. The Reference Court has then adverted to the evidence of the expert examined by the claimants Mr.Gangadhar Dattatraya Karkare who has deposed that after providing for reasonable deductions, the fair market price of the land irrespective of occupation by unauthorised structures can be arrived at, at Rs.105/-. The Reference Court, however has rejected the claim of the claimants on the finding that the instances relied upon by the claimants was in respect of small plot transactions of sanctioned lay out plan. The Reference Court has then opined that the claimants have failed to produce any evidence regarding the cost involved in evicting the hutment dwellers. There were about 340 slum dwellers occupying the plot since 1976. The Reference Court has also taken note of the decision of the Apex Court in the case of Kumari Veeraias & Ors. v. State of A.P. reported in 1995 (4) SCC 136. On this reasoning, the Reference filed by the claimants (Pundales) Dhadges came to be rejected on 14th September 1995. 7. In the Reference by Vartaks, besides relying on documentary 11 FA.1033.03.sxw evidence also examined five witnesses in support of their claim that the SLAO committed manifest error in arriving at the market value at the rate of Rs.43/- only. Whereas, he ought to have determined the market value of the said land at the rate claimed by them of Rs.269/- per sq.mtr. Significantly, before the Reference Court, the Vartaks (claimants) relied on sale instance in respect of Plot No.119 which was sold on 12th October 1984 at the rate of Rs.141.26 per sq.mtrs. (Exhibit 79). Besides producing the certified copy of the Sale Deed dated 12th October 1984 in respect of the said plot which was admeasuring 283.17 sq.mtrs., the claimants (Vartaks) caused to examine Vaishali Shashikant Sane to prove the said Sale Deed. The said Vaishali Sane had sold the said plot in favour of Mr.Parshuram Dhondu Kadam and Mr.Shankar Govind Jadhav. However, the Reference Court has discarded this sale instance on the finding that the claimants failed to produce copy of the Agreement for Sale on the basis of which the Sale Deed was executed. Besides, the sale was after a period of ten months. In addition, the Reference Court negatived the claim of the claimants on the finding that the sale instances which were relied by the claimants were in respect of small plots whereas, the plot under acquisition was around 17822.75 sq.mtrs. The Reference Court further found that the method adopted by the SLAO was not arbitrary or improper. The 12 FA.1033.03.sxw Reference Court also took notice of the fact that inspite of the deficiencies in the sale instance pressed into service by the claimants, the SLAO assumed the fair market price in relation to the land under acquisition at the rate of Rs.100/- per sq.mtr. While reverting to the sale instance Exhibit 79, the Reference Court has opined that the same cannot be reckoned, as it was post Notification. The Reference Court then upheld the deductions provided for by the SLAO as permissible and reasonable ones. The Reference Court has adverted to the decision of the Apex Court in the case of K.S.Shivadevamma & Ors. v. Assistant Commissioner & Land Acquisition Officer & Anr. Reported in (1996) 2 SCC 62. The Reference Court has also noticed that although the SLAO has provided for deduction of 25% towards road and open space and reduced that area to arrive at the net saleable plot area, but has multiplied the rate determined by it with the total area of the plot i.e. 17822.75 sq.mtrs. At the end, the Reference Court has also noticed that the Reference filed by the neighbouring land owners (Pundales) pertaining to the same Notification has already been rejected. Taking overall view of the matter, the Reference Court proceeded to dismiss the Reference Application filed by the claimants (Vartaks) for enhancement of the compensation on 3rd August 2001. 13 FA.1033.03.sxw 8. As aforesaid, Reference filed by Pundales was rejected in earlier point of time. As a result, the said Pundales and Dhadges filed Appeals in this Court against the said decision in 1996 which were numbered as First Appeal No.26 of 1996. Whereas, Dhadges filed separate Appeal being First Appeal No.425 of 1998. However, the said Appeal has been subsequently withdrawn by the said Dhadges. With the result, we are left only with the Appeal of Pundales and the other Appeal subsequently filed by Vartak after the decision of the Reference Court in their reference which has been numbered as First Appeal No.1033 of 2003. 9. We have heard Counsel appearing for the claimants as well as the acquiring Authority. With the assistance of the Counsel appearing for the parties, we have waded through the evidence in the respective Appeals which was produced by the claimants in the Reference filed by them separately. We have thought it appropriate to dispose of both the Appeals together by this common Judgment as we find that the matter in issue to be answered will be overlapping, as it arises out of common Notification in respect of one consolidated plot of 17822.75 sq.mtrs. which incidentally was owned by two owners Vartaks and Pundales. The Vartaks owned 14 FA.1033.03.sxw portion of the said plot admeasuring 8311.37 sq.mtrs.; whereas, Pundales owned the other portion of the same plot admeasuring 9511.38 sq.mtrs. We are fortified in adopting this approach, considering the exposition of the Apex Court in the case of Attar Singh v. Union of India & Anr. reported in (2009) 9 SCC 289. In Paragraph 17 of the said decision, the Apex Court, in essence, has opined that the claimants pertaining to common Notification should not be treated differently. We are conscious of the fact that separate evidence has been adduced by the parties in the respective Reference Applications but while answering both the Appeals, we would analyse the evidence of both the References to arrive at one common conclusion to obviate any conflicting opinion in respect of the market price or any other incidental issue relating to the compensation payable to the respective claimants. 10. After having considered the submissions in both the Appeals and perusing the material on record, in our opinion, the following points may arise for our determination. 15 FA.1033.03.sxw POINTS FINDINGS (1) Whether the method adopted by the SLAO for determination of fair market price of the acquired land is just and proper? Yes. (2) Whether the post sale instance can be discarded in toto as has been done by the Reference Court? No. But for reasons recorded, it would not affect the conclusion. (3) Whether the fair market price determined in respect of land under acquisition by the SLAO and confirmed by the Reference Court is just and proper? Yes (4) Whether the deductions provided for by the SLAO and as upheld by the Reference Court can be said to be permissible and just and proper? Yes (5) What order? POINT NO.1 : 11. As is noticed earlier, the SLAO has considered the sale instances which had come on record for arriving at fair market price of the acquired land. Although the SLAO has noticed that the sale price in respect of the instances relied upon by the claimants or the other sale instances was ranging only between Rs.32/- to Rs.87/- for different period and that price 16 FA.1033.03.sxw was offered in respect of small building plot, has yet fixed the fair market price in respect of the land under acquisition at Rs.100/- per sq.mtr. for the net buildable plot. The SLAO has adverted to total eight sale instances to record the said finding. Insofar as the description of the sale instance given by the SLAO in the Award, the correctness thereof is not in dispute. The area of plot, the date of sale as well as the average price per sq.mtr. of the respective transaction as stated in Paragraphs 6 and 7 of the Award are not challenged before us. As is noticed by the SLAO, the value of the land in the concerned transaction varied between Rs.32.46 to Rs.87/- per sq.mtr. The value of Rs.87/- per sq.mtr. was as recent as of September 1984 i.e. nine months post Notification. The SLAO discarded the sale instances relied by the claimants (Vartaks) in respect of Plot No.61 and Plot No.58 on the finding that the same were slightly higher rates in comparison to the sale instances at Serial Nos.7 and 8 which was only for Rs.82/- and Rs.87/- per sq.mtr. respectively. In substance, the SLAO has adopted the method of comparable sale instances to conclude that at best, the claimants would be entitled for price of Rs.100 /- per sq.mtr. for the net building plot. 12. The claimants on the other hand argued that the method that ought to have been applied by the SLAO should have been that of a belting system. 17 FA.1033.03.sxw According to the claimants, they have led evidence of expert witnesses who have deposed about the efficacy of belting system to arrive at fair market value of the land under acquisition. Our attention was invited to the experts’ evidence in both the References. In Reference instituted by the Vartaks, they examined Mr.Upendra Waman Dhongade (PW 2) as expert witness who has spoken about the methodology of belting system and how it could have been applied to the fact situation of the present case. Insofar as Reference filed by Pundales, they examined Gangadhar Dattatraya Karkare, P.W.5 as expert witness. The evidence given by both these experts in the respective References more or less proceeds broadly on the same basis. Both these experts have deposed that the appropriate method for valuation of the property would have been belting system. In their evidence they have stated that the sale instances which have come on record, could be taken as the basis for determining the value of the land under acquisition. Considering the location of each of this sale instance, the same were falling at best within the third belt. Whereas, the land under acquisition ought to be reckoned as falling within Belt No.1 and Belt No.2. On that assumption, the said witnesses have deposed that the price in respect of the land under acquisition would be superior to that of the price received in respect of the comparable sale instances. According to the expert witness examined by 18 FA.1033.03.sxw the Vartaks, the hypothetical plots which would be facing the Development Plan (DP) Road would fetch higher value to the extent of Rs.200/- per sq.mtr. whereas, the plots which were on the rear side, would fall in Belt No.2 and fetch around Rs.170/- per sq.mtr. Whereas, the expert witness examined by Pundale has claimed that the land under acquisition should fetch rate of at least Rs.250/- per sq.mtr. as it would be in Belt No.1. However, it is also noticed that the said witness has then provided for deductions including in respect of the unauthorised structures standing on the portion of the suit land reducing the potentials thereof and for which reason the price would be around Rs.105/- per sq.mtr. Even the expert witness examined by Vartaks has advocated for providing reasonable deductions on the same lines. 13. In the first place, the question is: whether the assumption of the two expert witnesses examined in the respective References that the only appropriate method to be applied for considering the fair market price of the land would have been Belting System, is correct. Our attention has been invited to the Manual of Land Acquisition for State of Maharashtra. Paragraph 174 thereof deals with valuation of the land by Belting. It mentions that in cases where large holdings having frontage on road and 19 FA.1033.03.sxw large depth are required to be valued and the evidence of land value of only small building plots with frontage on the same or similar road is available question is not so simple. In such cases, value by method of Belting is resorted to. It is further noted that the Belting method is applicable to N.A. lands or lands having N.A. potentials. Further, the value of belt having frontage of the road would be higher. This Manual also provides that the belting method should be worked out by keeping in mind the depth of belt and the values of belt. 14. We find that the assertion of the expert witnesses that belting method is the only method for determination of fair market price of the land under acquisition, is untenable. That plea of the claimants will have to be rejected. We say so because the expert witnesses have assumed that the land in question is a very “large tract” of land. Whereas, the depth of the plot belonging to Vartaks as shown in the map is only 75 mtrs. Further, it is not in dispute and has been accepted by the two witnesses that the frontage of both the plots either belonging to Vartaks and Pundales is towards existing DP road. At the relevant time, the said DP road was only around 33 feet wide which as per the Development Plan, was to be widened to 60 feet wide road. In other words, on the date when the Notification was 20 FA.1033.03.sxw issued, the width of the DP Road was not 60 feet as assumed. In fact, it was not