HON'BLE MR JUSTICE GHULAM MOHAMMED AND HON'BLE MR JUSTICE G. BHAVANI PRASAD L.A.A.S.No. 174 of 2007 % 03.02.2010 # The Project Officer, Singareni Collieries Company Limited, Bhoopalpali (Projects) Area, Bhoopalpalli, Warangal District. ..... appellant/respondent 2 AND Burra Komuraiah and 98 others .....respondents/claimants < GIST: > HEAD NOTE: !Counsel for Appellant: Sri J. Prabhakar ^Counsel for Respondents: Sri B. Narayan Reddy ? Cases referred [1] (1996) 7 SCC 3 2 (1998) 8 SCC 136 3 (2007) 11 SCC 347 4 (2004) 1 SCC 467 5 AIR 2003 SC 1987 6 AIR 2008 SC 399 7 (2007) 7 SCC 614 8 (2008) 11 SCC 65 9 (2008) 2 SCC 568 IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) PRESENT THE HON'BLE MR JUSTICE GHULAM MOHAMMED and THE HON'BLE MR JUSTICE G. BHAVANI PRASAD L.A.A.S.NO. 174 OF 2007 DATE: 03.02..2010 Between: The Project Officer, Singareni Collieries Company Limited, Bhoopalpali (Projects) Area, Bhoopalpalli, Warangal District. ..... appellant/respondent 2 AND Burra Komuraiah and 98 others .....respondents/claimants JUDGMENT: (per Sri Ghulam Mohammed, J) This appeal has been preferred by the Project Officer, Singareni Collieries Company Limited, under Section 54 of the Land Acquisition Act, 1894 (for short ‘the Act’), seeking to set aside the judgment and decree dated 17.8.2006 passed in O.P.No. 141 of 1993 on the file of Principal Senior Civil Judge, Warangal, wherein the learned Judge enhanced the compensation for the dry land from Rs. 4,000/- to Rs.36,000/- and for the wet land from Rs. 6,000/- to 36,000/- per acre. Brief facts of the case are that an extent of Ac. 108.05 guntas of land out of which Ac. 91.25 guntas is of dry land and Ac. 16.31 guntas is wet land situated at Bhupalpelli Village, belonging to the claimants was acquired by the Land Acquisition Officer for the opening of New Mines KTK-2A Incline and KTK-3 Magazine vide notification published in the gazette dated 23.1.1988 issued under Section 4(1) of the Act. The Land Acquisition Officer after following the procedure prescribed under law, awarded compensation at Rs. 4,000/- per acre for dry land and Rs. 6,000/- per acre for wet land. The Land Acquisition Officer fixed the value for excise trees at Rs. 1,85,700/-, and for other trees at Rs. 1,13,924/-. The claimants received the compensation under protest and contended that the amount awarded was insufficient. Being dissatisfied with the Award, the claimants sought for a reference under Section 18 of the Act and the Award has been accordingly referred to for proper adjudication of the market value in question and was taken on file by the learned Principal Senior Civil Judge, Warangal. In order to establish the claim, the claimants examined PWs. 1 to 11 and got marked Exs. A1 to A-18 and on behalf of the Referring Officer RWs-1 to 3 were examined and Exs. B1 to B8 were marked. It is to be noticed that there are about 98 claimants and they are all marginal farmers and they possess small extents of land located at Bhoopalpalli, Warangal District. The trial Court after scrutinizing and analysing the evidence on record and placing reliance on sale transactions viz., Exs. A1 to A-8, determined the market value at Rs. 36,000/- per acre uniformly irrespective of dry or wet land. Sri J. Prabhakar, learned counsel appearing for the appellant vehemently contended that the reference Court has committed a serious error in enhancing the compensation by taking into account un-comparable sale statistics and in this case the land acquired is very large extent. The second contention is that the reference Court ought to have placed reliance on Ex. A1, a Xerox copy of the award dated 3.6.1998 of the Land Acquisition Officer and Sub-Collector, Mulug, in respect of a land acquired for the purpose of construction of a guest house by Singareni Colleries Company Limited, at Bhupalapally Village wherein the Land Acquisition Officer has fixed the market value at Rs. 20,000/- per acre and the same was enhanced to Rs. 38,500/-by the Reference Court and that became final and no appeal is preferred. The third contention is that when a large extent of land is acquired for the purpose of excavation of coal, a small bit of land cannot be the pointer so as to determine the market value unless proper deductions are given. The fourth contention is that the lands acquired in the present case are located at a far off place, whereas the land acquired in Ex. B- 1 is on the main road of Chityal Town and hence the acquired land in the present case stands on a different and distant footing. To substantiate his contentions, he relied on the Supreme Court judgment reported in RATANLAL GUPTA AND OTHERS VS. UNION OF INDIA[1],wherein the Supreme Court at paragraphs 4 and 5 held as under: “4. The question, therefore, is what would be the correct market value that could be fixed as compensation of the land in question. It is seen that strong reliance was placed before the Reference Court on the sale transaction relating to developed area and undeveloped area. In the undeveloped area, the market value was Rs. 23 per square yard in the developed area, the market value was Rs. 39.34 pr square yard. It is seen that the High Court found these lands connected with developed roads. 5. It has been repeatedly held by a catena of decisions of this Court that when the market value is to be determined on the basis of small plots of land the same price cannot be expected to be realised when a large track of land is offered to a willing purchaser by a willing vendor. When layout has been obtained and the land is situated in a developed area, though sale relating to small plots of lands were produced before the Court, on recording a finding that such sales are genuine and not intended to inflate the market value of the land, this Court held that necessary directions should be given in determining the true market value based on resaleable price at a future date.” He also drawn our attention to another judgment of the Apex Court reported in KANWAR SINGH AND OTHRS VS. UNION OF INDIA[2], wherein the Supreme Court at paragraph 8 held as under: “8. So far as the first argument that the appellants ought to have been given the same rate of compensation which was given to the claimants of the adjoining village is concerned, the amount of compensation for the land acquired depends on the market value of land on the date immediately before the notification under Section 4 of the Act or when same land is acquired and offer of compensation is made through an award. Whether such an offer of compensation represents the market value of the land on the date of notification under Section 4 of the Act, has to be determined on the basis of evidence produced before the Court. The claimants have to prove and demonstrate that the compensation offered by the Collector is not adequate and the same doe not reflect the true market value of the land on the date of notification under Section 4 of the Act. This could only be done by the claimants by adducing evidence to the effect that on the relevant date, the market value of the land in question was such at which the vendor and the vendee (buyer and seller) were willing to sell or purchase the land. The consideration in terms of price received for land under bona fide transactions on the date or preceding the date of notification issued under Section 4 of the Act generally shows the market value of the acquired land and the market value of the acquired land to be assessed in terms of those transactions. Sale instances showing the price fetched for similar land with similar advantages under bona fide transaction of sale at or near about the issue of notification under Section 4 of the Act is well recognized to be the appropriate evidence for determining the market value of the acquired land.” He has further placed reliance on the judgment of the Supreme Court reported in SHARADAMMA VS. SPECIAL LAND ACQUISITION OFFICER AND ANOTHER[3], wherein at paragraph 14 it held as under: “ 14. In our view, the learned counsel for the claimant is right in submitting that both the Courts were not correct in not awarding compensation as claimed by the appellant. The counsel is also right in referring to B.M Krishnamurthy (LAND ACQUSITION OFFICER VS. B.M. KRISHNA MURTHY –(1985) 1 SCC 469), particularly as to location of the land in question for claiming enhanced compensation vis’a’vis land bearing Survey No. 14. For the said purpose, he relied upon para 6 of B.M.Krishnamurthy. The counsel also drew our attention to a map which is on record. It clearly shows that the land of Survey Nos. 112 and 113 is better located than the land of Survey No. 14 in B.M. Krishnamurthy. He also referred to deposition of Syed Abdul Khader, the then Special Land Acquisition Officer, Bangalore from 1964 to 1967. The witness admitted that Kissan Factory was located at a distance of 3/4th mile from the acquired land. He further stated that the Corporation limits were about two furlongs from the acquired land. There was industrial potentiality of the lands though the acquired lands were not converted. He stated that Survey No. 112 was situated adjoining Bangalore-Madras Highway and was in between Old Madras Road and Madras-Bangalore railway line. According to him, New Aero Engine Factory was very much in existence at the time of acquisition and it was opposite Survey No. 112 on the other side of the Old Madras Road. Near about the acquired land, there were other factories also. Corporation limit was within a distance of 50-60 yards from New Aero Engine Factory limits. He further stated that approach road from NGEF to Old Madras Road was adjacent to Survey No. 112. Byappanahalli Railway Station was 1 or 1 ½ furlongs from Survey No. 112. He admitted that Survey No. 113 was abutting Survey No. 112 and what was stated about Survey No. 112 held good as regards Survey No. 113 also. He admitted that Bangalore-Madras Road was a National Highway.” He has further drawn our attention to the Supreme Court judgment reported in PANNA LAL GHOSH AND OTHERS VS. LAND ACQUSITION COLLECTOR AND OTHERS[4]. The relevant portion of the judgment is at paragraph 8, which reads as under: “8. The second issue relates to the payment of solatium @ 30% under Section 23(2) of the Act. Solatium is “money comfort” quantified by the statue and given as a conciliatory measure for the compulsory acquisition of land of the citizen, by a welfare State such as India. (Narain Das Jain v. Agra Nagar Mahapalika ((1991) 4 SCC 212) Thus the statutory amount of solatium is intended to compensate the owner for his disinclination to part with his property.” On the other hand, the learned counsel appearing for the respondents vehemently contended that there are about 98 claimants and they all are marginal farmers and by virtue of acquisition, they have deprived of their livelihood under Article 21 of the Constitution of India. He also contended that their avocation is agriculture and they have been lost their valuable cultivating land. He further contended that the reference court has not committed any serious error in determining the adequacy or otherwise of the compensation and rightly relied upon the sale transaction entered into at the relevant period and determined the market value properly and hence, no interference is called for. To justify his contentions, he relied upon the Supreme Court judgment reported in RAVINDER NARAIN AND ANOTHER VS. UNION OF INDIA[5], wherein, the Supreme Court at paragraphs 6 and 7 held as under; “6. Where large area is the subject matter of acquisition, rate at which small plots are sold cannot be said to be a safe criteria. Reference in this context may be made to three decisions of this Court in The Collector of Lakhimpur V. Bhuban Chandra Dutta (AIR 1971 SC 2015). Prithvi Raj Taneja (dead) by LRs. V. The State of Madhya Pradesh and another (AIR (1977 SC 1560) and Smt. Kausalya Devi Bogra and others etc v. Land Acquisition Officer, Aurangabad and another (AIR 1984 SC 892). 7. It cannot, however, be laid down a an absolute proposition that the rates fixed for the small plots cannot be the basis for fixation of the rate. For example, where there is no other material it may in appropriate cases be open to the adjudicating Court to make comparison of the prices paid for small plots of land. However, in such cases necessary deductions/adjustments have to be made while determining the prices.” He further relied upon the judgment reported in LUCKNOW DEVELOPMENT AUTHORITY VS. KRISHNA GOPAL LAHORI AND OTHERS[6]. The relevant portion of the judgment is at paragraphs 15,16 and 22, which reads as under: “15. Where large area is the subject matter of acquisition, rate at which small plots are sold cannot be said to be a safe criteria. Reference in this context may be made to three decisions of this Court in The Collector of Lakhimpur V. Bhuban Chandra Dutta (AIR 1971 SC 2015). Prithvi Raj Taneja (dead) by LRs. V. The State of Madhya Pradesh and another (AIR (1977 SC 1560) and Smt. Kausalya Devi Bogra and others etc v. Land Acquisition Officer, Aurangabad and another (AIR 1984 SC 892). 16. It cannot, however, be laid down a an absolute proposition that the rates fixed for the small plots cannot be the basis for fixation of the rate. For example, where there is no other material it may in appropriate cases be open to the adjudicating Court to make comparison of the prices paid for small plots of land. However, in such cases necessary deductions/adjustments have to be made while determining the prices.” 21. It is well settled that in respect of agricultural land or undeveloped land which has potential value for housing or commercial purposes, normally 1/3rd amount of compensation has to be deducted out of the amount of compensation payable on the acquired land subject to certain variations depending on its nature, location, extent of expenditure involved for development and the area required for roads and other civic amenities to develop the land so as to make the plots for residential or commercial purposes. A land maybe plain or uneven, the soil of the land may be soft or hard bearing on the foundation for the purpose of making construction; may be the land is situated in the midst of a developed area all around but that land may have a hillock or may be low-lying or may be having deep ditches. So the amount of expenses that may be incurred in developing the area also varies. A claimant who claims that his land is fully developed and nothing more is required to be done for developmental purposes, must show on the basis of evidence that it is such a land and it is so located. In the absence of such evidence, merely saying that the area adjoining his land is a developed area, is not enough particularly when the extent of the acquired land is large and even if a small portion of the land is abutting the main road in the developed area, does not give the land the character of a developed area. In 84 acres of land acquired even if one portion on one side abuts the main road, the remaining large area where planned development is required, needs laying of internal roads, drainage, sewer, water, electricity lines, providing civil amenities etc. However, in cases of some and where there are certain advantages by virtue of the developed area around, it may help in reducing the percentage of cut to be applied, as the developmental charges required may be less on that account. There may be various factual factors, which may have to be taken into consideration while applying the cut in payment of compensation towards developmental charges, may be in some cases it is more than 1/3rd and in some cases less than 1/3rd. It must be remembered that there is difference between a developed area and an area having potential value, which is yet to be developed. The fact that an area is developed or adjacent to a developed area will not ipso facto make every land situated in the area also developed to be valued as a building site or plot, particularly, when vat tracts are acquired, as in this case, for development purpose.” He further placed reliance on the judgment reported in GAFAR AND OTHERS VS. MORADABAD DEVELOPMENT AUTHORITY AND ANOTHER[7], wherein the Supreme Court at paragraph 9 held that the Reference Court noticed that the sale instances produced before the Court related to developed lands with various facilities, which the acquired lands lacked, and it was stated that the value therein could not be adopted, and that a reduction of 35 to 60% from the values shown was justified. It also observed that the Reference Court should be more specific in dealing with the cases and it was expected to discuss each of those sale transactions, compare the lands contained therein with those that were involved in the acquisition, with reference to the advantages and disadvantages, the extents, the nature of the land, the facilities available and other relevant matters before determining what would be the just compensation payable to the landowners in the acquisition. It also observed at paragraph 11 of the judgment as under: “ Various decisions were brought to our notice and particular emphasis was placed on the decision in RAVINDER NARAIN VS. UNION OF INDIA((2003) 4 SCC 481) wherein it was held that there was no absolute prohibition in taking not of the rates fixed for ale of smaller plots and making it the basis for fixation of compensation for larger extents. There cannot be any quarrel with the proposition that there is no absolute prohibition. But the fact remains that normally, when larger extents are involved in an acquisition, it will be more prudent to rely on sale deeds of larger extents and not to base the assessment of the compensation on values fetched at sales of small extents. In this case, transactions involving sales of land in acres or of larger extent were imply ignored by the awarding officer without giving adequate reasons for such exclusion except vaguely stating that they were distantly located. Even those sale instances would have provided a basis for assessing the compensation due in respect of the acquired lands subject to adjustments for the distance or other disadvantages or advantages compared to the acquired lands. The basic sale deed relied on by the awarding officer was in respect of sale of a portion of hi property by a seller which had an extent of only 100 square metres and even there, the price fetched was only Rs. 80 per square metre.” He further relied on the judgment reported in STATE OF HARYANA VS. GURBAX SINGH[8]. The relevant portion is at paragraph 8, which reads as under: “The Division Bench ha only marginally increased the compensation from Rs. 99,668 per acre to Rs. 1,25,000 per acre. The Division Bench has merely given the benefit of the two sale deeds being Exhibits P-8 and P-9 in a very limited manner by ordering the enhancement at the rat of 12% per annum for two years since the acquisition in this case had taken place in the year 1983 whereas those sale deeds were of January and March 1981. We do not find anything wrong in this approach. The Division Bench has also justified this increase by observing that there was continuous rise in the prices of land. It has further justified that though the two transactions were in respect of the small pieces of lands, however, the State had not challenged the action of the learned Single Judge in accepting those sales as a valid basis. It has also further observed that there was no evidence that the market value of the land was lesser than the one mentioned in the two sale deeds. All that the Division Bench, however, did was to marginally increase the quantum of compensation by adding 12% per annum for a period of two years and dong so, the Division Bench rounded off the market value for the year 1983 at Rs. 1,25,000/-. We do not find anything wrong in this and, therefore, the appeals filed by the Government of Haryana (Civil Appeals Nos. 2461-65 of 2000) against this marginal increase would have to be dismissed. They are accordingly dismissed. However, the matters do not stop here.” The point that arises for consideration is as to whether the Reference Court has considered the matter in a proper perspective so as to determine the market value of the land properly and what are the factors, which the Reference Court has noticed while enhancing the compensation? The first contention of the learned counsel appearing for the appellant is that small bit of land cannot be criterion or the basis or pointer to determine the market value. We have considered that the acquisition made in this particular case is for the opening of New Mines KTK-2A incline and KTK-3 Magazine. The lands in question are agricultural land and the claimants have been deprived of their livelihood and they were raising cotton and chillies besides other crops and they are deprived of that income also. It is no doubt true that when a large extent of land is acquired, small piece of land cannot be the sole criterion but nonetheless that land cannot be discarded totally so as to dislodge the claim of the claimants when they seek adequate compensation. As regards the other contention that for the purpose of housing, deduction of 1/3rd has to be made towards developmental charges, making of roads and other amenities, but here, in this particular case as no such deduction was given some marginal deduction of 10% has to be given is merit less. No doubt, the land situated in Ex. A-11, copy of order in O.P.No. 38 of 1990 dated 16.8.1999 and the land in Ex. A1, Xerox copy of Award datd 3.6.1998 are located nearer to Parkal to Mahadevpur road which is passing through Bhupalapally (V) in 1988, but that cannot be the sole criterion, but nonetheless the point that is to be considered is whether the acquired land has got similar advantages or disadvantages. The acquired lands are situated nearer to the distance of 1.5 to 2.00 kms from the main road. In this case the acquired lands are small bits of agricultural lands and they have got similar potentiality, therefore, this contention is also equally merit less. The Land Acquisition Officer while passing the award has taken into consideration the sales statistics viz., Ex. B-4 and B7 which are for lower sale consideration while ignoring the higher sale considerations and that by itself does not prohibit or debar the claim from seeking adequate compensation from the Reference Court. Accordingly, they sought for Reference under Section 18 of the Land Acquisition Act. It is to be noticed that the settled preposition of law is that when the land is acquired, the persons who lost their lands claim higher compensation and for that they have to establish the claim stating that they are entitled for just compensation under the Act. Here in this particular case, the proceedings under the Land Acquisition Act are compulsory acquisition by the State Government. Be that as it may, coming to the evidence and marking of the documents, on behalf of claimants 11 witness were examined as PWs 1 to 11 and exhibits A1 to A18 were marked and on behalf of the appellant RW-1 to 3 were examined and Exs. B1 to B8 were marked. PW-1 is claimant No. 9 in the OP, who deposed that