1 IN THE HIGH COURT OF BOMBAY AT GOA FIRST APPEAL NO. 175 OF 2004 WITH CROSS OBJECTION STAMP NUMBER NO.2076 OF 2004 FIRST APPEAL NO. 175 OF 2004 The Director, Institute of Petroleum Safety Health and Environment Management (Oil and Natural Gas Corporation), 84/C Layout Davorlim, P.O. Navelim, Salcete, Goa at Present with Office at Quitol, Betul, Goa. ....... Appellant. V/s. 1. Ms. Iona Loyola, 2. Ms. Elma Maria Loyola, 3. Elaine Francisco Loyola, All three represented by their Attorney Maria Azavedo, No.4, Alto Monte Society, 3rd Floor, Margao, Salcete, Goa. 4. Land Acquisition Officer, South Goa Sub-Division, Quepem, Goa. ........ Respondents. Mr. M. B. D'Costa, Senior Advocate with Mr. J. A. Lobo, Advocate for the appellant. Mr. M. S. Sonak, and Mr. J. Supekar, Advocates for respondents No.1 to 3. Mr. M. Salkar, Addl. Govt. Advocate for respondent No.4. 2 STAMP NUMBER NO.2076 OF 2004 1. Ms. Iona Loyola, 2. Ms. Elma Maria Loyola, 3. Elaine Francisco Loyola, All three represented by their Attorney Maria Azavedo, No.4, Alto Monte Society, 3rd Floor, Margao, Salcete, Goa. ..... Cross-Objectionists. V/s. 1. Land Acquisition Officer, South Goa Sub-Division, Quepem, Goa. 2. The Director, Institute of Petroleum Safety Health and Environment Management (Oil and Natural Gas Corporation), 84/C Layout Davorlim, P.O. Navelim, Salcete, Goa ...... Respondents. Mr. M. S. Sonak, and Mr. J. Supekar, Advocates for the cross objectionists. Mr. M. Salkar, Addl. Govt. Advocate for respondent No.1. Mr. M. B. D'Costa, Senior Advocate with Mr. J. A. Lobo, Advocate for the respondent No.2. 3 CORAM :- A.S. OKA & F.M. REIS, JJ. Date of reserving the judgment : 11/06/2010 Date of pronouncing the judgment : 22/06/2010 J U D G M E N T : (Per A.S. OKA, J.) By this first appeal, the appellant has taken an exception to the Judgment and Award dated 17th March, 2003 passed by the learned District Judge, South Goa, at Margao in Land Acquisition Case No.159/1996. 2. The acquisition relates to a land surveyed under Survey No.74/1 admeasuring 92,000 sq. metres situated at Village Quitol, Taluka Quepem, South Goa. Notification under Section 4 of the Land Acquisition Act, 1894 (hereinafter referred to as “the said Act”) was issued on 13th December, 1989, which was published in the Official Gazette dated 4th January, 1990. The said land was notified for the public purpose of setting up an Institute for Petroleum Safety and Management Environment for ONGC at Betul. An award under Section 11 of the said Act was made on 17th June, 1992. The first to 4 third respondents, who are claimants, claimed compensation at the rate of Rs.80/- per sq. metre. The Land Acquisition Officer by Award dated 17th June, 1992 offered compensation at the rate of Rs.5/- per sq. metre. A reference application was filed under Section 18 of the said Act by the first to third respondents. In the said reference application, the first to third respondents claimed market value at the rate of Rs.80/- per sq. metre. The first to third respondents examined their constituted attorney as a witness. Three other witnesses, including an expert valuer were examined by the first to third respondents. The acquisition was initiated for the benefit of the present appellant. The present appellant was made party-Opponent No.2 in the reference under Section 18 of the said Act. No evidence was adduced by the appellant. The first to third respondents relied upon 4 different sale deeds as sale instances. The trial Court relied upon a sale deed dated 24th August, 1984 (Exhibit AW.1/F) relating to a land situated at Village Betul admeasuring 1000 sq. metres. The market value reflected from the said sale deed is Rs.45/- per sq. metre. The second sale deed relied upon by the trial Court is dated 19th October, 1990 (Exhibit AW.1/D) relating to land admeasuring 144 sq. metres, which was sold at the rate of 60/- per sq. metre. By the impugned Judgment 5 and Award, the reference Court granted compensation at the rate of Rs.60/- per sq. metre, together with statutory benefits under Section 23(1-A), Section 23(2) and Section 28 of the said Act. 3. Learned Senior Counsel appearing for the appellant submitted that though the appellant had engaged an Advocate, the said Advocate did not properly contest the reference and, therefore, the witnesses examined by the first to third respondents could not be cross examined and appellant could not adduce evidence. He submitted that an opportunity deserves to be granted to the appellant to adduce evidence by sending back the matter to the trial Court. He submitted that the appellant became aware of the impugned Judgment and Award only after the notice of execution the award was served. He submitted that the two sale deeds on which reliance was placed by the District Court are not in respect of comparable lands. Firstly, he submitted that the said sale instances relate to small areas of 1000 sq. metres and 144 sq. metres respectively. He submitted that the sale instance of an area of 144 sq. metres is a case of distress sale. He submitted that in any event, the area of the acquired land was 92,000 sq. metres and the said 6 sale instances were of a very small area. He pointed out the evidence on record regarding the nature of the acquired land. He submitted that the evidence of claimants indicates that the acquired land slopes down towards the sea. He submitted that the acquired land was a rocky land. He submitted that even if the acquired land was to be developed for the purposes of tourism, development costs would have to be incurred. He submitted that the acquired land is affected by CRZ Notification and no development thereon was possible. He submitted that the land will be governed by Article 9 of the Colonial Act. He submitted that grant of lands bordering on the maritime coasts within a continuous belt of 80 metres from the high tide line was prohibited and, therefore, the first to third respondents had no title to the said land. 4. The learned Counsel appearing for the first to third respondents supported the impugned Judgment and Award. He has also made submissions in support of the cross-objections. He submitted that the last submission made by the appellants was never canvassed before the trial Court and no ground based on the said contention is incorporated in the Memorandum of Appeal. He submitted that the CRZ Notification has come into existence after 7 publication of notification under Section 4 of the said Act and in fact, after the Award was made under Section 11 of the said Act. He submitted that the evidence on record indicates that the acquired land and the land subject-matter of the Sale Deed dated 24th August, 1984 were similarly situated and comparable on the relevant date. He submitted that the acquired land, at the relevant time, had a slope towards the sea and, therefore, had natural potential for using it for tourism purposes. He pointed out that its value increases inasmuch as on one side there is a river and on the other side there is Arabian sea. He relied upon the two sale deeds which are considered by the trial Court as comparable. He submitted that the acquired land, considering its peculiar location, had a special value for making a resort and, therefore, the cost of development will not be on the higher side. He submitted that as the sale instances relied upon by the trial Court were of comparable land, the market value at the rate of Rs.80/- per sq. metre ought to have been fixed by the reference Court. 5. We have given careful consideration to the submissions. The second last submission made by the learned Senior Counsel appearing for the appellant was that the acquired land is affected by 8 CRZ Notification. However, it is not disputed that the CRZ Notification has come into existence after the Award under Section 11 of the said Act was made. Apart from the fact that the said factual contention was not raised before the reference Court and in the Memorandum of Appeal, the same has no relevance as the CRZ Notification was not in force on the date of acquisition of the land. The last submission made by the learned Senior Counsel appearing for the appellant is based on certain provisions of Colonial Act. The said contention was admittedly not raised before the reference Court. The said contention has not been raised even in Memorandum of Appeal and at the fag end of the hearing first appeal, the said contention is sought to be raised on assumption that the law relied upon by the appellant was applicable to the acquired land. Factual inquiry will be necessary for that purpose. Apart from that, a serious prejudice will be caused to the first to third respondents if at such a belated stage an altogether a new contention is allowed to be raised. Therefore, the said contention cannot be considered on merits. 6. Now what survives for consideration is the question as to whether the two sale instances relied upon by the trial Court were of 9 comparable lands and whether they afford a reasonable basis for determination of market value of the acquired land. 7. It will be necessary to advert to the evidence adduced by the first to third respondents. The said respondents examined one Maria Jose Azavedo, their constituted attorney. In examination in chief, she stated that the acquired land is situated at Cutbona in Betul and the same is bounded on the western side by Betul beach. The witness stated that the acquired land is mainly a plateau which slopes down to the sea. It is stated that the acquired land is bounded on the north by a river and there was a spring towards the northern side of the acquired land on the date of notification. The constituted attorney produced the sale deed dated 24th August, 1984 ( Exhibit AW1/G ) executed by Laxmibai Kane and others and one Mrs. Mecia Pinto. The constituted attorney has not stated anything about the location of the land subject-matter of the sale deed. The witness also produced Sale Deed dated 19th October, 1990 (Exhibit AW1/D) between Gustao Costa and Remedios Simoes and stated that the land subject-matter of the sale deed was at a distance of 500 metres from the acquired land. He stated that the acquired land was a levelled land and the subject- 10 matter of the said sale deed was an undiluted land. 8. The second witness examined by the first to third respondents is Gustavo Costa who was the Vendor under Sale Deed dated 19th October, 1990. He stated that the acquired land, subject- matter of this appeal, is situated at a distance of one kilometre from the land subject-matter of sale deed dated 19th October, 1990. He stated that the property of the first to third respondents overlooked the Arabian Sea on the west and the river on the north. He stated that even prior to the acquisition of the property of first to third respondents, there was a road passing by the side of the said property and electricity supply was available. He stated that he had an opportunity to see the acquired land prior to the acquisition. He stated that the acquired land was suitable for use by building hotel and resort and, therefore, the acquired land was superior to his land. 9. The third witness examined by the first to third respondents is one Mr. Savio Monteiro Costa. He stated that he was holding a property which was at a distance of 0.5 kms. from the 11 acquired land. He stated that the property of Mr. Kane was abutting his property on the western side. He stated that the property of Mr. Kane was bounded on the west by another property, also belonging to Mr. Kane. He stated that the acquired land and the property of Mr. Kane formed part of the same range of the mountain. He stated that the two properties were similar in nature. It must be noted here that the land of Mr. Kane is subject-matter of Sale Deed dated 24th August, 1984 (Exhibit AW1/G ). He stated that the acquired land was more advantageously located as it had a better view of the Arabian Sea as compared to the land of Mr. Kane. He stated that one Mrs. Pinto who had purchased the said land of Mr. Kane had approached him in the year 1984 for purchasing his property at the rate of Rs.45/- per sq. metre. 10. Mr. Ernesto Moniz, a Civil Engineer and Valuer was examined by the first to third respondents. The Valuation Report dated 26th August, 2002 submitted by the said valuer is produced on record and the same has been exhibited. The valuer has relied upon the sale deeds which are produced by the first to third respondents. It must be noted here that though he purported to make the valuation as of 4th 12 January, 1990 he admittedly inspected the acquired land on 7th April, 2000. Therefore, the learned reference Court rightly discarded the said evidence inasmuch as the expert had not inspected the acquired land on a date which is proximate to the date on which the notification under Section 4 of the said Act was issued. 11. The sale instance of the sale deed dated 19th October, 1990 ( Exhibit AW1/D ) is in respect of a very small area of 144 square metres. Therefore, it is not comparable. The evidence of the AW2, the vendor of the sale deed, will have to be considered. He has not specifically stated that the acquired land was comparable with the land subject matter of the said sale deed. Hence, the said sale deed cannot be relied upon. Now the question is whether the land subject-matter of Sale Deed dated 24th August, 1984 can be said to be comparable. The evidence of AW.3 is very relevant on this aspect. He has stated that the property of Mr. Kane was abutting his property. The property of the witness was at a distance of 0.5 kms. from the acquired land. He stated that the acquired land and the property of Mr. Kane which is subject- matter of the said sale deed dated 24th August, 1984 form part of the same range of the mountain. He stated that the acquired land was more 13 advantageously located than the land of Mr. Kane as the acquired land has a better view of the Arabian Sea as compared to the land of Mr. Kane. The witness stated that the acquired land was accessible by road which was leading upto the property of Mr. Kane and after property of Mr. Kane, it proceeded further. He stated that the purchaser Mrs. Pinto under the sale deed dated 24th August, 1984 had approached him as she was interested in purchasing his property. He stated that Mrs. Pinto had offered to pay a price of Rs.45/- per sq. metre for the land of the witness. Considering the said evidence, it can be said that the land subject matter of the said sale deed and the acquired lands are comparable. 12. The learned trial Judge has accepted the fact that the land subject-matter of the said sale deed at Exhibit AW1/G was comparable to the acquired land. However, the learned trial Judge relied upon the sale deed dated 19th October, 1990 in respect of an area of 144 sq. metres where the rate was Rs.60/- per sq. metre. We find that the area of the land subject-matter of the sale deed dated 19th October, 1990 is too small as compared to the area of the acquired land. Moreover, there is no evidence on record to show that the said land was 14 comparable with the acquired land. 13. Therefore, the only basis on which the estimation of the market value of the acquired land can be made is the sale deed dated 24th August, 1984 in respect of an area of 1000 sq. metres which was comparable to the acquired land in all respects as evidenced from the deposition of AW.3. It is not the case of the respondents that the market value of the lands in the area have been reduced after 1984. As pointed out by the learned Counsel appearing for respondents no.1 to 3, considering the peculiar position of the acquired land which was on a slope overlooking Arabian Sea, the acquired land could have been certainly put to use by constructing resort or hotel, as in the present case, the date of notification under Section 4(1) is much prior to the date of CRZ Notification. For calculating the market value as of 4th January, 1990 escalation of 10% per year will have to be granted. Therefore, by adding 10% per annum for five and half years, the market value will be about Rs.76/- to Rs.77/- per square metre. Considering the fact that the acquired land had better potential for a use as a resort, the market value will have to be taken on the relevant date at Rs.80/- per square metre. The Apex Court has consistently held that 15 estimation of market value by comparison method has always an element of guess work. The area of the acquired land is 92,000 sq. metres. Appropriate deductions will have to be made on account of development cost, which ranges from 20 % to 67 %. Considering the large area of 92,000 square metres, cost of development cannot be taken as minimum. Maximum cost cannot be taken as the natural gradient was suitable for construction of a resort. Hence, this is a case where 50 % of the market value will have to be deducted on account of development charges. Thus the market value of the acquired land on the relevant date will be Rs.40/- per sq. metre and to that extent the appeal must succeed. The cross – objections must fail. 14. Hence, we pass the following order : (i) The impugned Award is modified and it is declared that the market rate of the acquired land shall be Rs.40/- per sq. metre, instead of Rs.60/- per sq. metre. Rest of the Award stands confirmed. (ii) Cross objection Stamp Number No. 2076/2004 stand dismissed. 16 There will be no order as to costs both, in appeal as well as in the cross objection. A.S. OKA, J. F.M. REIS, J. ssm