1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY C IVIL APPELLATE JURISDICTION FIRST APPEAL NO. 1168 OF 1989 Smt. Anandibai Vasantrao Lonkar since deceased 1. Shri Dhanottam Vasant Lonkar Aged 60 years, One of the New Trustee of Omkareshwar Mahadeo Devasthan, Residing at 1286-A, Shivaji Nagar Pune-5. 2. Shri Gangadhar Vasant Lonkar, Aged 55 years one of the New Trustees of Omkareshwar Mahadeo Devasthan Residing at 1286-A, Shivaji Nagar, Pune-5. .. Appellants. V/s. 1. The Special Land Acquisition Officer No.15, Pune 2. The Pune Municipal Corporation, Shivaji Nagar, Pune-5. .. Respondents. Shri A. S. Khandeparkar with D.B. Lonkar i/by M/s Thakordas & Madgavkar for the Appellants Smt. G.P. Mulekar AGP for Respondent No.1. Shri Rajdeep S. Khandeparkar for Respondent No.2. 2 CORAM : A.M. KHANWILKAR AND A. A. SAYED , JJ. DATED : 1ST JULY, 2010. ORAL JUDGMENT ( PER A.M. KHANWILKAR, J.) 1 Heard the learned Counsel for the parties. This appeal takes exception to the Judgment and Decree passed by the Extra Jt. District Judge, Pune, dated 10th October, 1988, in Land Reference No.44 of 1981. 2. The land in question is CTS No. 244 of Shaniwarpeth in the City of Pune. The land was admittedly, reserved for the purposes of Dhobighat, Children's park, play-ground and for 110 feet wide road under the development plan of Pune City. As a result of this, acquisition of the land proceeded on issuance of Notification under Section 6 of the Land Acquisition Act r/w Section 126 of Maharashtra Regional Town Planning Act. The Appellants claimed compensation at the rate of Rs. 157.25 per sq. meter and later on for enhancement rate of Rs. 215/- per sq. meter before the Land Acquisition Officer. The Appellants relied upon sale instances to justify the said claim. The Land Acquisition Officer by his Award dated 20-11-1979, determined the market rate at the rate of Rs. 100/- per sq. meter for the said land. He thereafter provided deductions to the extent of Rs. 64.40 per sq. meter under different heads. The net market value of the land 3 was determined as Rs. 35.60 per sq. meter. The Appellants being dissatisfied with the said Award instituted reference before the District Court. The said reference was numbered as Land Reference No. 44 of 1981 before the Extra Jt. District Judge, Pune . As aforesaid, the District Court by the Impugned Judgment and Decree partly allowed the reference. In the first place, the District court on analyzing evidence on record felt that the prevailing market price of the land ought to be fixed at the rate of Rs. 120/- per sq. meter. It then provided for deductions under different heads to the extent of Rs. 72.65 per sq. meter. Thereafter, the net market price of the said land was fixed at Rs. 47.35 per sq. meter. On the basis of said computation the reference was disposed of on the following terms:- "ORDER The reference is allowed to the following extent:- The opponent is directed to make payment of all the compensation in lump sum to the claimant. The opponent is directed to pay total compensation, inclusive of all benefits due to the Amending Act. The total compensation payable to the claimant is Rs. 14,60,206/-. If any amount has already been paid to the claimant under this reference, that shall be deducted from this amount payable to the claimant. The amount shall be paid to the claimant or deposited in Court within three months from this award. If it is not so paid, the amount to carry interest at the rate of 9% per annum from the date of the award till realization. However, the lump sum amount of compensation shall be held as trust corpus and kept intact and invested in long-term fixed deposit with any scheduled or co-operative bank, aforesaid u/s. 35 of the Bombay Public Trusts Act, or in Public security earning higher rate of interest, and only the interest thereon shall be spent on the objects of the trust, and the trust corpus shall not 4 be spent or utilized on the objects of the trust without the prior sanction of the Charity Commissioner, Maharashtra State. The Court shall issue a refund certificate for refunding the excess Court fee paid erroneously of Rs. 11,300/- to the claimant." In the circumstances of the case, the claimant shall be entitled to half the costs of the reference. " 3. It is noticed that the State challenged the decision of the District Court to the extent of grant of interest at the rate of 12% per annum under Section 23 (1-A) of the Land Acquisition Act by way of First Appeal No. 912 of 1989. Whereas, the appellants-claimants filed the present appeal challenging the market price determined by the District Court, as well as the different deductions provided therefor. In so far as the appeal filed by the State of Maharashtra is concerned, being First Appeal No. 912 of 1989, the same has been allowed vide Judgment and Decree dated 19th August 2005. For the reasons stated in the said decision, this Court modified the Judgment and decree of the District Court to the extent of awarding interest under section 23 (1-A) of the Act. For some inexplicable reasons the present appeal remained undecided. No reason is forthcoming as to why the parties, including Counsel for the State or Corporation, failed to inform the Court that substantive appeal filed by the Claimants is also pending for consideration before this Court. 4. Be that as it may, in this Judgment we are not called upon to examine 5 the correctness of the decision on the issue of interest awarded under Section 23 (1-A) of the Act, which issue, as aforesaid, is already concluded in terms of the Judgment of this Court dated 18th August, 2005 while disposing of the First Appeal No. 912 of 1989 filed by the State of Maharashtra. We would confine this judgment only to the following two points:- (1) Whether the market price in respect of the subject land determined by the District Court at the rate of Rs. 120/- per sq. meter is just and proper? (2) Whether the District court has erred in deducting an amount of Rs. 72.65 per sq. meter under different heads. 5. In so far as the first point is concerned, it is noticed that the claimants in all relied upon 15 different instances to justify their stand that prevailing market price of the land ought to be determined at Rs. 215/- per sq. meter. The District Court has analyzed all those instances, as can be seen from the discussion in paragraph 17 of the impugned judgment which reads thus:- "(17)...On an average, the valuation can be done by taking into consideration the sale instances Nos. 6,4,15,8 and 9. These are sale instances from June 1967 to November, 1968. They are giving roughly Rs. 92/- per sq. meter as the rate. These are in respect of plots, which are very much comparable to the average plot, which 6 would be carved out in the acquired land. The claimant, however, wants to rely on instance No.14 in respect of plot No.8. This is a transaction of 17.1.1969, showing rate of Rs. 121.55 per sq. meter. This appears to be abnormally high rate, considering the other sale instances. Moreover, that is a plot directly abutting a road, and therefore, it cannot be compared with the normal plot in the property under acquisition. Instances, No.1, 10,11, 12 and 13 are not of such value, because, they are of 1966. Only instance No.10 is of 1970. But again it is in respect of a plot, which is directly on road, with a regular shape. It gives rate of Rs. 105.99 per sq. meter. We may consider this as reasonably nearer to the acquired property. If this plot is considered as showing the normal market value of the land, then in December, 1971, which is the relevant date, we can assume that there was appreciation of about 15% more, as the time- lag is near about 1-1/2 years. Therefore, on the relevant date, the market value would be about Rs. 120/- per sq. meter of a comparable plot with the land under acquisition. Similarly, sale instances No.4, 6, 8, 9 and 15 show that till 1968, the land value was about Rs. 92/- per sq. meter in the nearby locality. If average 10% rise is considered in the land value, then about Rs. 120/- per sq. meter would be the value of the land on the relevant date. Shri Paranjpe, the learned Advocate for the claimant has, however, contended that the appreciation in land value from 1967 to 1971 was at the rate of 30% per annum. I do not find any justification for concluding that the appreciation is in land value was that high. Shri Paranjpe has contended that sale instance No.14, which is of January, 1969 shows the value as Rs. 121.55 per sq. meter as against the average Rs. 92/- per sq. meter in 1967-68. He, therefore, says that this instance shows rise in price by 30%. However, it may be that seen instance No.9 is of November, 1968, showing Rs. 91.61 per sq. meter as the land rate. It is impossible to believe that within couple of months, the rise was 30%. The sale instance No. 14 is an isolated transaction, showing very high value of the land, and cannot be considered as representative one. That sale has to be ignored. I would, therefore, hold that unencumbered normal land price was Rs. 120/- per sq. meter on the relevant date." 6. The District Court has eventually held that instance No.10 was the closest comparable instance. That pertained to year 1970 and the market price of plot was stated to be Rs. 105.99 per sq. meter. The District court has 7 however, observed that the said plot is directly facing road, with a regular shape, which got rate at Rs. 105.99 per sq. meter. Nonetheless, the said instance was taken to be the nearest instance both in point of time, as well as location of the property. The District Court then assumed that the appreciation of about 15% in the span of 1-1/2 years if taken into account the maximum market price of the subject land can be determined at Rs. 120/- per sq. meter, which price can be said to be fair market price or comparable price in the present case. It is not in dispute that the total area of plot in question acquired is 13700/- sq. meter, (i.e. over 3 Acres). Whereas, the instance pressed into service by the appellant were small plots as is noticed from the map Exh.144. 7. The Appellants however, has placed emphasis on instance No. 14 which pertains to transaction in respect of plot No.8, dated 17-1-1969 for an amount of Rs. 121.55 per sq. meter. This instance has been discarded by the trial Court on the finding that the said price is abnormally high price considering the other sale instances of the plots in the area during the same time. The trial Court has however, noted that the said plot No.8 was directly abutting the road for which reason it cannot be said to be comparable instance with the normal plot. Further considering the size of the property under acquisition, the topography and location, the sale instances pressed into service were incomparable. In so far as this view taken by the trial 8 Court is concerned, we have no hesitation in holding that the same is a possible view. The view so taken is supported by the evidence on record and the logic applied by the trial Court is unexceptional. 8. The learned Counsel for the Appellants however, then placed emphasis on another instance pertaining to land which was abutting the subject property which was acquired in or around June/July, 1974. According to the Appellants, the market price for the said property has been determined at Rs. 236/- per sq. meter. Even this aspect has been carefully examined by the lower Court in paragraph 22 of its judgment which reads thus:- "The claimant has relied on one judgment in Municipal Appeal No.20/1975 for contending that the land price was Rs. 22/- per sq. foot. In this appeal, no doubt Rs. 22/- per sq. foot has been awarded as the market value by th Court in respect of CTS No.233. This CTS No. 233 is admittedly adjoining the suit property. But it must be remembered that the relevant date considered for valuing that property was July, 1974. That is, it was almost 3 years after the relevant date in this case. In view of acquisition of the property in this case, it was obvious that land prices around must have gone up very much subsequently. Moreover, CTS. No.233 has a small and square plot. It was better situated as would be seen from the map. In any event, the valuation of CTS No.233 is not very much material for our purpose, because it was much a after the acquisition in the present case. By that time, the construction of bridge along the river was also in progress. The development had become faster. That was the plot which was last remaining in or around the locality, and therefore, its price naturally must have increased. I am not inclined to give much weight to the valuation of CTS No.233, in these 9 circumstances." 9. The Court has found that this instance was also not comparable having regard to the fact that by the time this property was acquired the development had already been effected. It is noticed that this plot was adjoining to the suit property the valuation done in respect of the said plot was almost 3 years after relevant date and in view of the acquisition of the suit property the said plot was obviously quoted for the better price. Even this approach of the lower Court is unexceptionable. 10. We further find substance in the grievance made by the Counsel appearing for the Corporation that the Lower Court has not considered the instances pressed into service by the acquiring authority bearing CTS No. 229 admeasuring 111.2 sq meters acquired by Notification dated 16th December, 1971, which was around the same time. The market price of the said plot was determined at Rs. 108/- per sq. meter. The Acquiring Authority had brought the said instance on record by way of Exh. 50 as well as report of the valuer which has dealt with the same. That evidence has been completely overlooked by the trial Court. There is absolutely no observation in that regard. Significantly, the said plot was owned by the claimants themselves and they were fully aware of the said Notification issued on 16th December, 1971 and the market price thereof determined at Rs. 108 per sq. 10 meter. Further, the claimants accepted the said market price. They did not bother to challenge the same by way of reference. This being a crucial fact brought on record, could not have been overlooked by the trial Court. Suffice it to observe that in so far as the rate determined by the trial Court in the sum of Rs. 120/- per sq. meter in respect of the suit plot, the same cannot be said to be unrealistic, perverse or manifestly wrong. As mentioned earlier, in our opinion, the view so taken is a possible view. No interference with regard the said approach of the trial Court is warranted. 11. The next issue that needs to be addressed is about the deductions effected by the trial Court under 4 different heads. Can it be said to be impermissible. At the outset, we may notice that even the Counsel for the claimants, who had appeared before the trial Court, had conceded that the land under acquisition requires the valuation on the basis of hypothetical plotting scheme. To effectuate that it became necessary to provide for deductions. The trial Court has interalia provided the deductions under 4 different heads. Firstly, with regard to the deferment of sale of plot; costs of infrastructural development; Costs of legal charges, architectural fees, Advertising charges; and charges for development of property. The discussion in this regard is found in paragraph 20 of the impugned decision which reads thus:- 11 "20. Now, we have to consider, as to what would be the deductions for developing the property. As pointed out already, the total saleable land was only 10, 275 sq. meters. On sale of this land at the rate of Rs. 120/- per sq. meter, the amount that would be realized would be Rs. 12,33,000/-. The plots from the land were not expected to be sold instantly. Even the expert of the claimant has accepted that there would be one year's deferment to be adopted in selling of the plots. As per the expert of the claimant himself, if there is deferment of one year, then the total amount would have to be multiplied by 0.9346. Therefore, the gross value of the saleable land on considering the deferment would be Rs. 12,33,000 X 0.9346. That would be Rs. 11,52,361/- (A). From this gross amount certain other deductions, as stated by the claimant's expert himself will have to be considered. The claimant's expert has accepted that cost for infrastructural development, cost of earth-filling, cost of construction of retaining wall, and cost of providing stone-pitching would ultimately be Rs. 2,15,706/-. This amount is worked out after assuming that the construction would take about 2 years and therefore, the total cost of Rs. 2,30,000/- is reduced to Rs. 2,15,706/-. (B). This amount is fixed, as it is adopted by the claimant's expert Shri Karkare. The next item of deduction is of legal charges, architect's fees, advertising expenses etc. It is admitted by the expert of the claimant that under this head, 10% of the gross realization would be the expenses required to be made. Therefore, 10% of (A) would be Rs. 1,15,236/-. (C). The claimant's expert further admits that developer's profit for covering the risk involved is 15% of the gross realization. In the instant case, 15% (A) would be Rs. 1,72,854/-. (D). Therefore, the total deductions, which will have to be made from the gross realization for working out the net realization would be (B) -i +(C) + (D). The amount comes to Rs. 5,03,796/-. (E) That would hence the net realization would be (A) minus (E). That would come to Rs. 6,48,565/-. (F) This amount (F) has to be distributed over the whole area of 13,700 sq. meters for working out the ultimate net rate of the property after development. So distributed, the rate comes to Rs. 47.34 per sq. meter i.e. to say Rs. 47.35 per sq. meter. I would, therefore, hold that the market rate of the whole property would be Rs. 47.35 per sq. meter on the relevant date. The evidence of claimant's expert that on basis of sale instance No. 14, the gross rate of land should have been considered as Rs. 228/- per sq. meter by adopting 30% per annum as the rise in price cannot be accepted. This is because Rs. 120/- per sq. meter was not the representative price of all lands, nor is there justification to 12 say that there was 30% rise in the land price. The expert examined on behalf of the opponent has stated that Rs. 100/- per sq. meter was the market rate of land on the relevant date. After deducting the expenses required for development, he has stated that Rs. 35.60 per sq. meter would be the net value of the developed property. I do not accept this opinion, because the expert on behalf of the opponent has shown unnecessary deductions. The expert has not taken into consideration that some of the plots from the developed property would ultimately come on the main road. the opponent's expert has unreasonably discarded sale instances No.8 and 9 on the ground that they are situated far off. The opponent's expert also does not take into consideration the increase in the land value every year. That is why, his opinion cannot be accepted wholly." 12. In so far as the deferment of sale of plots is concerned, the trial Court multiplied the total amount of sale price of the plot in question of Rs. 12,33,000/- by 0.9346. Upon providing for such deduction the price of the land is worked out to Rs. 11,52,361. In so far as the multiplier applied by the trial Court, the same is on the basis of evidence produced by the claimants themselves. The appellant-claimants relied on the evidence of private valuer, who has specified the multiplier as 0.9346. As can be noticed from the valuer's report and the evidence of the valuer, who has given justification about the deductions. Therefore, there is no substance in the argument advanced by the Counsel for the appellants with regard to the deduction on account of deferment of the sale of plot. 13. The next deduction provided by the trial Court is in respect of 13 infrastructural development costs. Even this deduction is founded on the evidence given by the private valuer examined by the appellants themselves. He has provided for costs of infrastructural development, costs of earth- filing, costs of construction of retaining wall, and costs of providing stone- pitching. The aggregate expenses specified in this behalf in the valuation report submitted by the appellants' witness is Rs. 2, 30,800/-. Instead, the trial Court has reduced the said amount to Rs. 2,15,706/-. The deduction is provided on the assumption that it would take about 3 years for completing construction. Even with regard to this deduction we find no reason to depart from the view taken by the trial Court. 14. The next deduction is in respect of legal charges, architect fees, and advertising charges etc. Even these deductions are based on the evidence given by the appellants' witness. He has provided for that deductions to the extent of 10% of gross realization. The Trial Court has adopted the same ratio in providing for deduction of 10% in computing the net market price of the land in question. Even with regard to this deduction we find no infirmity in the approach of the trial Court. 15. The last deduction is on account of development provided for covering risk involved upto 15% of the gross realization. Even this percentage of deduction has been recommended by the appellants' expert 14 witness. According to his conclusion, the deduction towards this head would work to around Rs. 3,28,425. However, the trial Court has provided for deduction only of Rs. 1,72,854 in relation to the suit land. For the same reason therefore, even this deduction cannot be faulted with. 16. In other words, it is not possible to countenance the challenge of the appellants either for providing deductions or for that matter that the said deductions are excessive as such. In our opinion, the trial court has arrived at the said conclusion relying on the evidence available on record and moreso, adduced by the appellants themselves. In our opinion, the view taken by the trial Court is a possible view and cannot be said to be manifestly wrong or perverse which would warrant interference by this Court. As no other contention has been raised by the appellants, the appeal ought to fail. 17 The learned Counsel for the Corporation however, contended that as a matter of fact the lower Court has committed manifest error in granting compensation on the basis that the appellants are entitled for market price for the entire area of plot admeasuring 13,700 sq. meters. For, admittedly, the plot admeasuring 3425 sq. meters was required to be kept open and was unavailable. In his submission, the appellants would at best be entitled for compensation for the area of plot admeasuring 10,275 sq. meter only. This 15 submission is raised for the first time across the bar. We have already noticed that the State Government had