1 IN THE HIGH COURT OF BOMBAY AT GOA FIRST APPEAL NO. 47 OF 2005 WITH CROSS OBJECTION AND FIRST APPEAL NO. 323 OF 2005 1. Special Land Acquisition Officer, South Goa KRCL, Amey Guest House, Davorlim Road, P. O. Navelim, Salcete-Goa. 2. The Chief Engineer, Konkan Railway Corporation Ltd., Rawanfond, Margao, Goa. ... Appellants versus Shri Anandrao G. S. Kenkre, R/o Ponsulem, Canacona, Goa. ... Respondent Shri A. D. Bhobe, Advocate for the Appellants. Shri C. A. Coutinho, Advocate for the Respondent. CORAM : N. A. BRITTO, J. DATE : 7TH OCTOBER, 2010. 2 ORAL JUDGMENT These appeals with Cross Objection are directed against common Judgment dated 22-4-2004 of the learned reference Court, Margao. 2. The common Judgment has decided two references made in two cases. L.A.C. No.230 of 1995 pertains to acquisition made pursuant to notification issued under Section 4(1) of the Land Acquisition Act, 1894 published on Official Gazette dated 21-7-1991. L.A.C. No. 411 of 1995 pertains to acquisition made pursuant to notification issued under Section 4(1) of the same Act published on Gazette dated 28-1-1992. 3. Both notifications pertain to the acquisition of land for the construction of the new B. G. line of Konkan Railway. By virtue of first notification, three lands of the applicant(hereinafter referred to as such) were acquired, namely 1600 sq. meters from survey No.184/22 and 825 sq. meters of survey No.180/4, both being coconut garden and 100 sq. meters from survey No.157/3 which was a bharad land. By award dated 31-3-1994, the L.A.O. awarded market value of Rs.4/- per sq. meter for the said lands and Rs.70,600/- as fruit value and Rs.8,165.85 as wood value and in all Rs.78,765.85 of the trees. By the second acquisition, 3025 sq. meters were acquired from survey No.189/3. In this case also, the L.A.O. awarded Rs.4/- 3 per sq. meter as the market value and Rs.1,78,925/- as fruit value and Rs.4,871.20 as wood value and in all Rs.1,83,796.20 of the trees. All the lands are situated in Poinguinim village of Canacona Taluka. 4. The applicant led common evidence. The Respondent did not lead any evidence. The applicant produced two sale deeds, one of the self same land i.e. of survey No.184/22 by which 806 sq. meters were sold by deed dated 1-7-1990 at the rate of Rs.33.50 per sq. meter to Dattu Naik who was examined as AW2. The applicants also produced sale deed dated 26-8-1994 of survey No.184/22 of the same village by which 300 sq. meters were sold at the rate of Rs.60/- per sq. meter. 5. The learned reference Court had, on a concession made by the Respondents, accepted the first sale deed dated 6-7-1990 as the best evidence to determine the compensation payable as the applicant was a party to the said sale deed and in this regard, the learned reference Court also placed reliance on the case of Special Deputy Collector and another v. Kurra Sambasiva Rao and others(AIR 1997 SC 2625) wherein it was held that the best evidence of the value of the property is the sale transaction in respect of the acquired land to which the claimant himself is the party. In other words, when evidence of sale is available of the very land acquired, one need not go beyond the land to find out its prices. The learned reference Court noted that one of the 4 acquired lands in L.A.C. No.230/95 has another part of survey No.184/22. The learned reference Court also noted that survey No.184/22 was adjacent to survey No.189/3 which were the subject matters of L.A.C. No.230/95 and L.A.C. No.411/95, respectively. Survey No.180/4 and survey No.157/3 were located on the southern side of survey No. 184/22, and both the properties were separated by survey No.180/5 but all the aforesaid four survey numbers in both the cases were adjacent and close to survey No.184/22, and, therefore the learned reference Court again accepted the Respondents submission that the sale deed dated 6-7-1990 was the most comparable instance, being part of survey No.184/22 and of the same nature as the other three acquired lands. As regards the second sale deed, the learned reference Court noted that it was a post notification sale deed, considering the dates of notification as 27-6-1991 in the first case, and 9-4-1992 in the second case. The learned reference Court did not take into account the second sale deed relying on the case of Karan Singh and others v. Union of India((1997) 8 SCC 186) further observing that the applicant had led no evidence to show that the price of the land in village Poinguinim had remained static, and, therefore there was no upward rise in the price of land subsequent to the date of notification and before the date of sale transaction on 26-8-1994, and, therefore the learned reference Court did not take into consideration the second sale deed for determining the market value of the acquired land. 5 6. The learned reference Court then rejected the applicant's contention that the price of sale deed dated 6-7-1990 was depressed because AW2/Dattu Naik was looking after the agricultural operations of their property. This, the learned reference Court did because the applicant had admitted in his cross-examination that such a fact was not recorded in the sale deed, and, therefore the learned reference Court proceeded to accept the price of Rs.32.50 as the correct price of the land sold by the said sale deed dated 6-7-1990. The learned reference Court then considered the cross-examination of the applicant and came to the conclusion that survey No.184/22 was a coconut garden containing fruit bearing trees and other forest trees, and considering that sale deed plot of 806 sq. meters of sale deed dated 6-7-1990 was surrounded with coconut, mango, arecanut, jackfruit and other trees, on balance of probabilities and based on photographs produced by the Respondents along with the negatives came to the conclusion that sale deed plot which was on west of survey No.184/22 had fruit bearing trees, and, therefore proceeded to hold that Rs.32.50 was the market value of a plot which was garden/bharad land with trees sold by deed dated 6-7-1990. In other words, the learned reference Court determined the price of sale deed plot as Rs.32.50 as on 6-7-1990, being of garden/bharad land. The learned reference Court took judicial notice of the general trend of rise in prices based on the observations of the Apex Court in Land Acquisition Officer v. L. Kamalamma((1998) 2 SCC 385) and further taking note that increase could 6 be granted on compounding basis, on the basis of the observations of the Apex Court in V. M. Salgaonkar and Brothers v. Union of India(1995(2) SCC 302) proceeded to determine the market value of the acquired land by the first notification at Rs.35/- per sq. meter and by second notification at Rs.38/- per sq. meter. Thus, for the approach adopted by the learned reference Court, in my view, cannot be faulted. 7. The learned reference Court thereafter placing reliance on the case of State of Haryana v. Gurcharan Singh and another(AIR 1996 SC 106) came to the conclusion that separate compensation cannot be awarded for the land and for the trees. Thereafter, the learned reference Court divided the compensation paid towards the trees by the area of the land and held that the applicant was paid around Rs.46/- per sq. meter for survey No.184/22, Rs.16/- for survey No.180/4. The applicant was entitled to excess of Rs.23/- per sq. meter for 825 sq. meters of survey No.180/4, and for Rs.31/- per sq. meter for 100 sq. meters of survey No.157/3 and was paid about Rs.64/- per sq. meter for survey No.189/3. 8. The learned reference Court although referred to the case of Koyappathodi M. Ayisha Umma v. State of Kerala((1991) 4 SCC 8) to know the methods of valuation as spelt out by the Apex Court, the learned reference Court failed to take note that in the same case the Apex Court had 7 clearly stated that it was settled law that in evaluating the market value of the acquired property, namely the lands and the building or the land with fruit bearing trees standing thereon, value of both could not constitute one unit; but separate units; The Apex Court had stated that it would be open to the L.A.O. or to the Court either to assess the lands with all its advantages with potential value thereof or where there is reliable and acceptable evidence available on record of the annual income of the fruit bearing trees, the annual net income of 15 years would be the proper and fair method of determining the market value but not both. In the former case, the trees were to be separately valued as timber and salvage expenses were to be deducted to cut and remove the trees from the land. 9. Even in the case of State of Haryana v. Gurcharan Singh and another(supra) which was a case decided on income method i.e. a number of years purchase of the actual or immediately profits of the lands acquired, the Apex Court had clearly recognized that even in such a case the applicants would be entitled to the fire wood value of the trees. In the words of the Apex Court, after compensation is determined on the basis of the value of the land from the income, applying suitable multiplier then the trees would be valued only as fire wood and necessary compensation would be given. The learned reference Court did not appreciate correctly the ratio of State of Haryana v. 8 Gurcharan Singh and another(supra) and did not even give the fire wood value of the trees. 10. This Court by unreported decision dated 6-10-2010 in First Appeal No.42 of 2005 in the case of Smt. Shrimati Vishwanath Archarya and another(expired, rep. by her legal representatives) v. Special Land Acquisition Officer and anotherhas held that:- “28.Therefore what we see from at least three judgments of the Apex Court is the consistent view that even in a case where market value is determined on the basis of income method, compensation is required to be paid for the timber value which aspect has not at all been considered by the learned Division Benches of this Court. 31. Did the Legislature mandate the Court to take the said matters into consideration for the purpose of including or excluding their value to the market value of the land as on the date of publication of the notification under Section 4(1) of the Act? To cite only two examples, clause thirdly deals with what is generally known as severance charges and clause fifthly deals with what is known as disturbance compensation. Compensation payable for these matters cannot be included and have never been included to the market value of the land as contemplated by clause first, of sub-section (1) of Section 23 and they are only added to the market 9 value of the land in determining the compensation payable on account of acquisition. As seen from clause secondly of Section 23(1), the Court is to take into consideration the damage sustained by the person interested, by reason of the taking of any standing crops or trees which may be on the land at the time of the Collector's taking possession thereof. That the owner of property or a person interested would be entitled to timber value or wood value of the trees existing on the acquired land, minus the cost of cutting and removing is a matter which is no longer res integra, as can be seen from the judgments of the Apex Court cited herein above. 32. In my view, the matters which the Court is required to take into consideration in determining the amount of compensation under clauses secondly to sixthly of sub-section(1) of Section 23 are distinct and separate items or components of compensation to be added to the market value of the land under clause, firstly and not to be deducted therefrom. Compensation payable under clause secondly being a separate component of compensation has got to be added to the market value of the land. The expression “damage sustained by the person interested, by reason of the taking of any standing crops or trees” would as well include the value of the coconuts which might have been there on the said trees and the same is to be necessarily added to the market value of the land determined under clause first of sub-section (1) of Section 23 of the Act. Fruit value would only mean the value paid for existing fruits, 10 in the absence of any other evidence to the contrary. Applicant had 68 coconut trees, 680 banana plants, etc. Therefore, it is safe to infer in the absence of any evidence led by the respondents, that Rs.2,67,125 was paid for the loss or damage caused on account of taking away of the fruits and wood/timber. If severance charges, contemplated under clause thirdly, or disturbance compensation contemplated under clause fifthly, have got to be added to the market value under clause first; there is no reason why the damage caused due to taking of crops i.e. fruits and trees should not be added to the same. In other words, the damage caused on account of taking away of crops/fruits or trees has got to be valued separately and added to the market value. That is what exactly the Land Acquisition Officer had done by awarding separately a sum of Rs.2,67,125/- to the applicant. 37. Therefore, what follows from sub-section (1) of Section 26 of the Act, is that market value under clause first is one of the items or components of compensation payable, along with damage caused on account of taking of crops or trees which requires to be separately compensated under clause secondly. Compensation payable is the total sum arrived at as per sub-section (1) of Section 23 of the Act. It will also include additional compensation at the rate of 12% and solatium at the rate of 30%, stipulated by sub-sections 1(A) and (2) of Section 23 of the Act, respectively. It may also be noted that sub-section (2) of Section 27 provides for costs to be paid when an applicant succeeds in a reference. The costs have 11 to be realistic and not nominal as imposed in this case by the learned Reference Court. 38. In my view, a combined reading of Section 23(1) and Section 26 of the Act shows that the damage caused/sustained by reason of taking of standing crops/fruits or trees has got to be valued separately and paid for, and added to the market value determined for the land. What is valued under clause secondly, cannot be deducted from what is valued under clause first of sub- section (1) of Section 23. What is valued under clause secondly is the damage and not the market value. So also what is valued under other clauses of sub-section (1) of Section 23. Compensation payable under sub- section (1) of Section 23 is the sum total of compensation assessed under clauses first to sixthly and therefore there is no room for any deduction”. 11. What follows therefrom is that the learned reference Court was not justified in deducting the compensation assessed by the Land Acquisition Officer under Clause Secondly from the market value assessed under Clause first, both of Sections 1 and 23 of the Act. 12. Consequently, the appeal is hereby dismissed. The Respondent will be entitled to compensation at the rate of Rs.35/- per sq. meter for the land 12 covered by the first notification and Rs.38/- per sq. meter for the land covered by the second notification will all consequential statutory benefits. N. A. BRITTO, J. RD