RFA No.2047 of 1994 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH RFA No.2047 of 1994 Date of decision: 22.07.2009 Mohinder Singh & Anr. ...appellants Versus Punjab State & Ors. ....Respondents CORAM: HON'BLE MR. JUSTICE VINOD K. SHARMA Present: Mr.A.C.Jain, Advocate, with Ms.Aparna Jain, Advocate, for the appellants. Mr.R.L.Gupta, Addl.A.G., Punjab, for respondents No.1 to 3. Mr.Sandeep Khunger, Advocate, with Mr.Surinder Kumar, SDO, Municipal Committee, Amritsar, for respondent No.4. --- VINOD K. SHARMA, J (ORAL) The appellants/landowners by way of this appeal have challenged the award dated 31.3.1994 passed by the learned Additional RFA No.2047 of 1994 2 District Judge, Amritsar qua the fixation of market value for the superstructure standing on the land acquired by the State Government under the Land Acquisition Act,1894 (for short the Act). Land measuring 36.04 sq.yards on which there existed a building was acquired by the State Government under the provisions of the Act and the award was passed by the Land Acquisition Collector on 12.10.1989. The Land Acquisition Collector assessed the value of the land to be Rs.79,200/- (Rupees seventy nine and two hundred only) and that of superstructure Rs.69,643.31P (Rupees sixty nine thousand six hundred forty three and paise thirty one only). The market value of superstructure was arrived at by taking the value to be Rs.99,490.45P (Rupees ninety nine, four hundred ninety and paise forty five only) on which 30 per cent deduction was made by relying upon the instructions issued by the State Government for assessment of value of building/properties for widening of streets, providing parking places, beautification and redevelopment of the areas around the Golden Temple Complex. However, instructions show that depreciation was to be made only with regard to the buildings which were 25-100 years old. However, nothing was shown as to what was the age of the building of the landowner/appellants. The appellants/landowners sought reference under Section 18 of the Act for enhancement of compensation of superstructure. Compensation qua the land was differently dealt with and is not the subject-matter of this appeal. The appellants/landowners claimed RFA No.2047 of 1994 3 compensation for superstructures at the rate of Rs.1,11,420.85P (Rupees one lac eleven thousand four hundred and twenty and paise eighty five only). The compensation was claimed on the basis of Annexure P.4 which was proved on record by Chatter Bhuj, Clerk, LA, Office Municipal Corporation, Amritsar. He specifically deposed therein that the estimate of property in question was made by Shri K.S.Sandhu, Land Acquisition Collector. Entries regarding assessment were made by Kulwinder Singh, JE which was duly signed by Shri K.S.Sandhu. Entries were proved on record as Ex.P.4. Learned Court did not accept Ex.P.4 primarily on the ground that these were only a rough estimate which was subject to adjustment on the later stage, therefore, could not be considered to be final. Learned reference court also held that depreciation was made after classification of building, the age of building, and that the criterion for depreciation was based on Government Instructions. Construction of the land owners being second class, 30 per cent deduction was made from the estimate. Learned counsel for the appellants contends that even if Ex.P.4 is taken to be merely a rough estimate the assessment made by the Collector was Rs.99,495.40P (Rupees ninety nine four hundred ninety five and paise forty only). In the absence of any material on record, no deprecation was permissible. In support of this contention learned counsel for the appellants placed reliance on the judgment of Hon'ble Supreme Court in the case of Union of India Vs. Savjiram and another AIR 2004 SC 4532, wherein RFA No.2047 of 1994 4 Hon'ble Supreme Court was pleased to lay down as under:- “ A bare reading of para 44 shows that it is a method of calculation indicated relating to the computation of the compensation. The compensation for houses and buildings are required to be calculated on (a) the present value of materials (b) in addition to the cost of construction at present rates. Both the components for working out the compensation relate to present value of the materials and cost of construction at present rates less the value of any materials made over to the proprietor. Obviously, the calculation has to be done on the basis of the present value or the present rates, as the case may be. The expression ‘present’ means in existence at the time at which something is spoken or written, being in a specified place, thing. Grammatically it means denoting a tense of verbs used when the action or event described is occurring at the time of utterance or when the speaker does not wish to make any explicit temporal reference. It also means the time being, now. Commonly, it denotes existence of a particular thing or a matter at the time of consideration. Obviously therefore after arriving at the cost of construction at the prevalent rate at the time of fixing the compensation or working out the value of the materials there is no scope for making any further deduction. Generally speaking depreciation is an allowance for the diminution in the value due to wear and tear of capital asset RFA No.2047 of 1994 5 employed by an assessee in his business. To put it differently, depreciation is the measure of the effective life of an asset owing to use or obsolescence during given period.” This judgment of Hon'ble Supreme Court cannot be of any help to the appellants as the Hon'ble Supreme Court was interpreting paras No.43 and 44 of the Land Acquisition Manual of Madhya Pradesh regarding compensation for houses and building which are not applicable to the State of Punjab. It was then contended by the learned counsel for the appellants, that even, in the State of Punjab there is no provision in the Manual of PWD (B&R) for depreciation out of the market value assessed and therefore, there is no justification, whatsoever, to uphold 30 per cent depreciation by the Collector on the assessed value. Learned Additional Advocate General, Punjab contends that the depreciation is permissible as per the instructions issued by the Chief Engineer, Municipal Corporation, Amritsar. It would be a matter of debate, whether any reliance can be placed on the instructions issued by the Chief Engineer, Municipal Corporation for assessing the market value of the superstructure. However, it is not necessary to go into this question, as even if these instructions are taken to be having force of the law, here is no justification for 30 per cent depreciation, as it is nowhere mentioned as to what was the age of the building, as the depreciation could be made at the rate of 10 per cent per annum for first 10 years and 2 per cent thereafter RFA No.2047 of 1994 6 subject to maximum of 60 per cent. Thus, the depreciation of 30 per cent cannot be upheld. The contention of the learned counsel for the appellants that they are entitled to compensation as per Annexure P.4, also cannot be accepted as the learned reference court rightly held that it was merely a rough estimate and not estimate of the price of the building as contended. The appellants are entitled to compensation for superstructure at the rate of Rs.99,490/- (Rupees ninety nine four hundred and ninety only). This appeal is accordingly partly allowed. Compensation of superstructure is enhanced to Rs.99,490/- (Rupees ninety nine four hundred and ninety only). The appellants shall also be entitled to statutory benefits like solatium and interest on the enhanced compensation. No costs. (Vinod K. Sharma) Judge July 22, 2009 rp