-1- IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE SIDE JURISDICTION First Appeal No. 1171 OF 2007 in L.A.R . No. 191 of 1999 The State of Maharashtra ) at the instance of the Special Land Acquisition ) Officer, Scarcity No.1, Nashik. )..Appellant versus 1. Smt. Fulyabai Kisan Govardhane ) 2. Vishnu Kisan Govardhane ) 3. Baburao Kisan Govardhane ) 4. Deoram Kisan Govardhane ) 5. Smt. Jijabai Kisan Govardhane ) 6. Smt. Draupadabai Bhaskar Shinde ) Through GPA Holder No. 10, ) All R/o Sanjegaon, Tal. Igatpuri, ) Dist. Nashik )..Respondents WITH FIRST APPEAL NOS. 1172 TO 1250 OF 2007 WITH CIVIL APPLICATION NOS. 2050 TO 2129 OF 2007 WITH CIVIL APPLICATION NOS. 2631 TO 2710 OF 2007 Mr. K.K. Tated, Assistant Government Pleader, for the appellants in all -2- matters. Mr M.S. Karnik for the respondents in all matters. Mr. K.B. Sonwalkar for the Applicant/intervenor in Civil Application Nos. 2631 to 2710 of 2007. CORAM: SWATANTER KUMAR, C.J.,& DR. D.Y.CHANDRACHUD ,J. Judgment reserved on 7.8.2007 Judgment delivered on 23 .8.2007 JUDGMENT(PER SWATANER KUMAR, C.J.) All the above 80 appeals have been preferred by the State against the judgment/award dated 31st March 2006 passed by 2nd Adhoc Additional District Judge, Nashik. As the appeals arise from the same judgment/award, they can conveniently be disposed of by a common judgment. 2. The facts giving rise to the present appeals fall in a narrow compass. The State of Maharashtra issued a Notification dated 2nd February 1994 under section 4 of the Land Acquisition Act, 1984, (hereinafter called the “Act”) intending to acquire 265.54.39 hectares of land from the revenue village Sanjegaon, taluka Igatpuri, District Nasik, for public purpose, namely, for Mukane dam out of Nadurmadneshwar project. In furtherance to the above Notification the declaration under -3- section 6 of the Act was issued on 10th June 1994. After having provided opportunity to the parties to present their case before the Special Land Acquisition Officer (SLAO) he had pronounced his award dated 14th December 1995 and depending upon the quality of the land the SLAO granted varied compensation to the claimants at the rate of from Rs.40,000/- to Rs.1,11,000/- per hectare for Jirayat lands. Bagayat lands were assessed at 1.5. times the rate of Jirayat land. 3. Dissatisfied with the quantum of the compensation awarded the claimants preferred References under section 18 of the said Act. The parties led documentary and oral evidence in support of their claims. The claimants had claimed enhancement of compensation before the Reference Court primarily on the ground that the acquired land was situated on Mumbai Agra Highway, Taluka had been developed as a developed zone for industrial area, various industries had been established, the land was irrigated and grouping of the land into various classes by the SLAO was not justified. It was also their case that the land in question had industrial potential. 4. The State had also led evidence before the Reference Court -4- and had submitted that the claimants were not entitled to any enhanced compensation. The Reference Court vide its judgment/award dated 31st March 2006 enhanced the compensation and granted uniform compensation to the claimants at the rate of Rs.1.69,231/- per hectare for Jirayat land and Rs.2,11,539 per hectare for Bagayat land and Rs.84,616/- for Potkharab land. 5. Feeling aggrieved by this judgment, the State has come up before this Court in the above appeals praying for reduction of the amount of compensation awarded to the claimants and for restoration of the Collector's award. The claimants have not challenged the impugned judgment and have chosen not to file any Cross objections. At least none has been listed along with these appeals. 6. It would be appropriate to discuss the evidence which was produced by the parties before the Reference Court. The claimants had claimed compensation at the rate of Rs.3 lacs per hectare. As already noticed, according to the appellants, there was no justification for the Reference Court to award such higher compensation to the respondents and the compensation awarded is primarily excessive and is not based -5- on evidence. The documentary evidence in the shape of sale instances produced by the respective parties can be usefully referred at this stage itself. Evidence produced by the State: Dt. of Sale deed Exh Village Area rate per hectare -------------------------------------------------------------------------------------------- 28.2.1992 140 Sanjegaon 0.45 Ares Rs.40,000 Gat No.777 paddy/grass land 14.2.1994 141 Sanjegaon 1.50 Hectare Rs.32,666 Gat No.941 17.7.1991 142 Sanjegaon 85 Ares Rs.15,882 Gat No.971/1 Jirayat land Evidence produced by the Claimants: Sale instances: Dt of Sale deed Exh Village Area rate per hectare 4.7.1989 42 Sajegaon 13 Ares Rs.1,15,385 Gat No 810 Jirayat land 30.5.1990 124 Sanjegaon 4.8 Ares Rs 1,35,417 Gat No.516 Jirayat land 31.1.1995 129 Mukane 60 Ares Rs.2,12,500 Gat No.447A -6- Judgments relied upon by the Claimants: L.R No 48 of 1997, sale deed dt. 4.7.1989 for Rs.15,000 L.R. No 588 of 1997, sale deed dt. 4.7.1989 for Rs.15,000 and L.R No.168 of 1999 sale deed dt. 2.4.94 for Rs. 1,27,500/- 7. Now we may discuss the effect of the evidence produced by the respective parties. The respondents have produced three sale deeds Exhs. 140, 141 and 142 respectively. As far as Exhibit 141 is concerned, that is a sale transaction relating to a period subsequent to the issuance of the notification under section 4 of the Act. As the notification was issued on 2.2.1994 and Exhibit 141 was executed on 14.2.1994, it may not be considered being post notification instance. As far as Exhibits 140 and 142 are concerned, they relate to the period prior to the date of notification and they are from the same village and can be considered by the court while determining the compensation payable to the claimants. However, their evidentiary value is hardly of any consequence as they cannot be relied upon by the court in proper determination of the compensation payable to the claimants, in as much as the sale consideration per hectare is much less than the -7- compensation awarded by the Collector himself. The court in any case cannot reduce the compensation to any amount lesser than the amount awarded by the Collector in view of Section 25 of the Act. The Collector, as already noticed, had awarded compensation at the rate between Rs.40,000 and Rs.1,11,000 per hectare depending upon the quality of the land. Resultantly, the evidence led by the State is of no help in determining the controversy. 8. The claimants produced, relied upon and proved Exhibits 42, 124 and 129 respectively in support of their claim for claiming higher compensation. As far as Exhibit 42 is concerned, this is a sale instance of 4th July 1989 relating to a sale of land admeasuring approximately 13 Ares. This is the sale instance, which is mainly relied upon by the Reference Court while awarding compensation. We would shortly revert back to the discussion on merits in relation to this piece of evidence. As far as Exhibit 129 is concerned, it is a sale instance of 31st January 1995 where 60 Ares of land was sold for a sum of Rs.2,12,500 per hectare. This evidence has been ignored by the Reference Court on the ground that it is much subsequent to the date of notification and that the land, subject matter of the said sale deed, was located in revenue estate -8- of village Mukhane which was not part of the acquired land under present award in question. We fully agree with the findings recorded by the Reference Court that Exhibit 129 is not comparable sale instance particularly in the face of the fact that comparable sale instances from the same revenue estate and the same village are available. 9. Exhibit 124 is another sale instance dated 30th May 1990 (which has been incorrectly referred by the Reference Court as Exh. 24 in the judgment, in fact, Exh. 24 is the electricity bill exhibited by the court), vide which the land from Gat No. 516 admeasuring O.4.8 Ares was sold for a consideration of Rs. 6,500/-, thus reflecting price of about Rs.1,35,417/- per hectare. This sale instance is closer to the date of notification than Exh. 42. The Reference Court was of the opinion that Exh. 124 could not be taken into consideration as the transaction is for a small piece of land. 10. While calculating the compensation payable to the claimants, the Reference Court, by referring to Exhibit-42, formed an opinion that the sale instance was genuine one and awarded compensation of Rs. 1,69,000/- per hectare for jirayat land, Rs. 2,11,539/- per hectare for -9- bagayat land and Rs. 84,616/- for pot kharab land. This figure was arrived at bye taking the sale consideration reflected in Exhibit-42 at Rs. 1,15,385/- per hectare as the base value and by giving them 10 per cent increase for the intervening period i.e. from the date of the sale deed dated 4th July, 1989 to the date of the notification i.e. 2nd February, 1994. This itself was treated as the basic price for fixing the compensation payable to the claimants of different kinds of lands. In the case of bagayat land he gave an additional increase of 25 per cent and in the case of pot kharab land he reduced 50 per cent from the basic rate fixed for jirayat land. Challenge to this computation is that the whole consideration is based upon hypothesis and imagination. No reduction has been made for sale of small pieces of land, as under Exhibit-42, only an area admeasuring about 13 ares was sold for a sum of Rs. 15,000/-. Thus the computation and the final figure arrived at by the Reference Court is entirely based upon guess work and as such the same should be set aside. 11. Certainly, there is some merit in the contention raised on behalf of the State. It is a settled principle of law that some discount is to be made on account of sale instances relating to small pieces of land -10- in the case of acquisition of large chunk of land. The lands were acquired for public purpose viz. for Mukane dam which was of great importance and utility to the public at large. Thus, it was expected of the Reference Court to make certain deduction while computing the compensation payable to the Claimants considering the fact that the sale deed Exhibit-42 was in respect of a small piece of land. In the facts and circumstances of the case and keeping in mind the location and potential of the land, it would be just, fair and reasonable to apply deduction at the rate of at least 25 per cent. The object of acquisition is construction of a dam and the land in question is surrounded by different villages. Even if the enhancement at the rate of 10 per cent per annum is stated to be reasonable, then it must be partially set off against the increase sought to be given to the claimants on account of lapse of time between the sale instances and the date of notification. We may also notice that there is nothing on record to prove that there was any increasing trend in the price of the land. To examine this aspect, even the sale instances proved by the respondent-State (Exhibits-140, 141 and 142) can be looked into. These sale instances do not show consistent and substantial increase in the sale price of the lands in question. The claimants themselves have produced Exhibit- -11- 124, the sale deed of 30th May, 1990, wherein again the land from the same village from Gat No. 516 admeasuring 0.4.8 ares was sold for Rs. 6,500/-. Thus the increase is marginal. Keeping in view the fact that various sale instances produced by the claimants relate to small pieces of land, the deduction is necessary and without deduction compensation cannot be determined as per just and fair market value of the land payable to the claimants for acquisition of their respective lands. Exhibit-124 has been rejected by the learned Reference Court on the ground that it relates to a very small piece of land i.e. only 0.4.8 ares. The reasoning recorded by the Court does not suffer from any infirmity. Certainly, it is a small piece of land and except to the extent that it reflects some increase in the sale price of the land the sale instance should be noted only for the limited purpose of noticing the marginal increase in the sale price of the acquired land but that cannot be the sole basis for determining the compensation payable to the claimants. The sale instances produced by the claimants do not show that the lands were purchased for any other purpose except the purpose for which they were being used at the time of registration of sale deeds. In other words, the land was being used only for agricultural purpose. Thus, the potential of the land under the sale deeds was nothing but -12- agriculture on the date of acquisition. The potential of the acquired land, from the evidence on record, is not materially different. The statement of witness No.2 is hardly of any use to the claimants inasmuch as she claims to have deposed on behalf of everybody. She has stated that the fields in gat No. 810 is a jirayat land and the acquired fields were better located and were better lands than the land purchased by her which is situated at half kilometres away. Nothing material came out in the cross-examination of this witness. The nature of the land being agriculture is established on record. The claim of industrial potentiality is, therefore, not established. Resultantly, the claimants cannot claim much benefit towards the potential of the land because of the intervening period from 1989 to 1994. 12. The learned counsel appearing for the Claimants, while arguing in support of the amount of compensation awarded, stated that this Court had awarded compensation in respect of village Mukane at the rate of Rs. 1,50,000/- per hectare. The said area is adjacent to the acquired land and similar compensation may be awarded in this case as well. This argument is of no help to the claimants. The claimants cannot take advantage of a judgment awarding compensation for acquired land -13- of an adjacent village. Even if it is so assumed that Village Mukane is an adjacent village, the compensation was awarded on the basis of the evidence recorded in those cases. It is not necessary for the Court to grant similar or higher compensation. In fact, some times it may be difficult even to take into account the judgments of the Reference Court in the case of adjacent villages because they may not be comparable instances in their true perspective. Reference in this regard can be made to the decisions of the Apex Court in (i) Pal Singh and others vs. Union Territory of Chandigarh, (1992) 4 SCC 400 and (ii) Karan Singh and others vs. Union of India (1997) 8 SCC 186. In Pal Singh (supra), the Supreme Court held as under: “No doubt, a judgment of a court in a land acquisition case determining the market value of a land in the vicinity of the acquired lands, even though not inter parties, could be admitted in evidence either as an instance or one from which the market value of the acquired land could be deduced or inferred as has been held by the Calcutta High Court in H.K. Mallick case, 79 CWN 378 based on the authority of the Judicial Committee of the Privy Council in Secretary of State for India in Council vs. Indian General Steam Navigation and Railway Co. Ltd., ILR 36 Cal 967, where the Judicial Committee did refuse to interfere with the High Court judgment in a land acquisition case based on previous awards, holding that no question of principle was involved in it. But what cannot be overlooked is, that for a judgment relating to value of land to be admitted in evidence either as an instance or as one from which the market value of the -14- acquired land could be inferred or deduced, it must have been a previous judgment of court and as an instance, it must have been proved by the person relying upon such judgment by adducing evidence aliunde that due regard being given to all attendant facts and circumstances, it could furnish the basis for determining the market value of the acquired land. In the cases on hand, the petitioners who are claimants claiming enhanced compensation for their acquired land have not produced the judgment of the High Court on which they propose to rely for finding the market value of their acquired lands as evidence in their cases, in that they could not have done so for the reason that it was not a judgment then available to them as a previous judgment relating to market value of land in the vicinity.” The Supreme Court in Karan Singh' s case (supra) held as under: “Learned counsel for the appellants then urged that the High Court erroneously discarded Exh.A-11 which was an award in respect of a land at Village Jhilmi Tahirpur on the ground that it was not a previous judgment of the Court. The land comprised in the award was acquired under notification issued under Section 4 of the Act on 27-7-1981. By the said award, the Court awarded compensation @ Rs. 625/- per sq.yd. It has earlier been seen that in the present case the notification issued under Section 4 of the Act was earlier in point of time than the notification issued for acquisition of land comprised in Exh. A-11. There is no quarrel with the proposition that judgments of Courts in land acquisition cases or awards given by the Land Acquisition Officers can be relied upon as a good piece of evidence for determining the market value of the land acquired under certain circumstances. One of the circumstances being that such an award or judgment of the court of law must be a previous judgment. In the case of Pal Singh v. Union Territory of Chandigarh it was observed thus: .... .... ..... -15- .... .... ..... Following this decision, we hold that it is only the previous judgment of a court or an award which can be made the basis for assessment of the market value of the acquired land subject to party relying on such judgment to adduce evidence for showing that due regard being given to all attendant facts it could form the basis for fixing the market value of acquired land.” 13. The Punjab and Haryana High Court in Regular First Appeal No. 3147 of 1992 decided on 17th February, 2000, observed as follows:- “Learned Counsel for the claimants places heavy reliance upon the judgment of this Court in the case of The State of Punjab and another vs. Gulzar Singh and others, RFA No. 2296 of 1993 decided on 25.8.1994 in relation to the lands falling in the revenue estate of village Khera Gajju, Tehsil Rajpura District Patiala. This judgment or the judgment giving rise to the appeal was never placed on record before the learned reference court, while deciding the present case. No application for additional evidence was filed in the present appeal till date. Thus, it would be difficult for the court to rely upon this judgment and consider its evidentiary value in the present case, because it will cause serious prejudice to the interest of the State in the present case, as it will have no opportunity to show by proper evidence whether this judicial instance is a comparable instance and could be made basis for determining the fair market value of the acquired land at the relevant time.” In yet another case, the Punjab and Haryana High Court in RFA No. -16- 882 of 1999 decided on 3rd February, 2000, observed as under. “Every case has to be determined on the basis of the evidence on record. The instances of judicial pronouncements have to be kept in mind but they cannot, in law and fact, be instrumental in destroying the other preferential admissible documents produced by the parties on record.” In RFA No. 459 of 1988 decided on 17th February, 1998, the Punjab and Haryana High Court observed as under. “It is true that normally similar amount of compensation would be payable to the identical situated landowner and specially when such lands are acquired by the same notification. This principle of law has to be made applicable within four corners of law and cannot be achieved by a power which otherwise is not vested in the Court.” 14. While categorizing the preferential order in which instances are to be considered, the Punjab and Haryana High Court in RFA No. 2436 of 1999 decided on 14th October,1999, observed thus: 'Another very important reason for not relying upon these instances is that there is sufficient relevant admissible and direct evidence available on record to determine the fair market value of the land. Sale instances have been provided on record and there are even judgments of the court in relation to the lands in the same revenue estates. It is a settled principle of law that the Court would normally rely upon the direct evidence like sale instances -17- which are admissible relevant and comparable and then judicial pronouncements and then other material evidence of the kind afore referred. Therefore, I would not prefer to rely upon these references and would keep them out of the zone of consideration for determining the fair market value of the acquired land on the date of notification. The only purpose that these exhibits are relevant is to show the increasing trend of prices of the acquired properties around the acquired land.” 15. In view of the above settled principles of law, we are of the considered view that the claimants cannot derive any advantage from the Division Bench judgment of this Court in the case of The State of Maharashtra vs. Yashwant Kahnu Shirsath( First Appeal No. 896 of 2005), decided on 19th July, 2007. The claimants would be entitled to get compensation on the basis of what they have proved on record. The instances produced by the Respondents should be relevant and comparable. On the basis of the oral and documentary evidence led by the parties, dealt by us above, now we would proceed to determine the compensation payable to the claimants. 16. Before adverting to the issue of market value and compensation to be awarded, it is worthwhile to consider factors to be considered while determining compensation under Section 23 of the Act -18- as noticed by a Full Bench judgment of this Court in First Appeal No. 1098 of 2003 and others (The State of Maharashtra vs. Prashram Jagannath Aute) dated 19th July, 2007,therein it was observed as under:- “This has been the consistent view of the Supreme Court as well as the various High Courts that there cannot be any hard and fast rule universally applicable to all cases relating to determination of compensation for the acquired land. It will be essential to refer to the facts of each case and apply considerations contemplated under section 23 of the Act in the light of judgments of the Court while ignoring the factors stated in Section 24 of the Act. In the case of Chimanlal Hargovinddas vs Special Land Acquisition Officer and anr AIR 1988 SC 1652 the Court court stated the principles beyond ambiguity and the court capitualised the factors regulating the discretion of awarding compensation by the court as under: “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