LA.APP. 149/2007 Page 1 of 34 * IN THE HIGH COURT OF DELHI AT NEW DELHI + LA.APP. 149/2007 Reserved on : 26.11.2010 Pronounced on: 24.12.2010 IN THE MATTER OF : MAJOR GENERAL KAPIL MEHRA AND ORS. ..... Appellants Through: Appellant No.1 in person. versus UNION OF INDIA AND ANR. ..... Respondents Through: Mr. Sanjay Poddar, Advocate with Mr. Ramesh Ray, Advocate for respondent No.1/Union of India. Mr. Ashwani Kumar, Advocate with Mr. R.K. Sharma, Advocate for respondent No.2/DDA. CORAM * HON'BLE MS.JUSTICE HIMA KOHLI 1. Whether Reporters of Local papers may Yes be allowed to see the Judgment? 2. To be referred to the Reporter or not? Yes 3. Whether the judgment should be Yes reported in the Digest? HIMA KOHLI, J. 1. The appellants are aggrieved by the judgment dated 24.02.2007 passed by the learned Additional District Judge, on a reference petition under Section 18 of the Land Acquisition Act, 1894, holding inter alia that they were not entitled to any enhancement in compensation, as fixed by the LAC, of the acquired land bearing Khasra No.1300/1 min. (697) measuring 12 bighas situated in the revenue estate of village Mehrauli, New Delhi and further, that they were not entitled to compensation for wells and trees; or LA.APP. 149/2007 Page 2 of 34 to an additional amount under Section 23(1)(A) from 25.03.1983 till 18.09.1998 or to interest under Section 34 of the Land Acquisition Act, 1894 (hereinafter referred to as `the Act‟). However, as per the supplementary award, the appellants were held entitled to interest under Section 17(3)(A) of the Act for the period from 19.02.1997 till the date of payment and to compensation for trees, if any. 2. As the instant case has a chequered history, the relevant facts need to be narrated before dealing with the respective submissions made by the parties. The appellants were the owners of a parcel of land measuring 12 bighas (i.e. 12096 sq. yards) situated in Khasra No.1300/1 min.(old) 697(new) in Vasant Kunj, Mehrauli, New Delhi (hereinafter referred to as “the said land”). On 13.11.1959, the said land was notified for acquisition, along with the surrounding land under the Act. On 7.12.1966, a declaration was issued under Section 6 of the Act. On 25.03.1983, the aforesaid land was acquired under Award bearing No.83/82-83 and the LAC took possession thereof and handed over the same to the DDA. The appellants challenged the said acquisition proceedings and the award, by filing a writ petition before the High Court, registered as Civil Writ Petition No.1134/1992. The said writ petition was allowed by a Division Bench of this Court vide judgment dated 30.01.1996 and the acquisition proceedings in respect of the said land were quashed. The respondents were directed to restore possession of the land to the appellants within 90 days with further directions that if, for any reason, it was not possible to restore the possession, then the appellants would be entitled to alternate land of equal area. LA.APP. 149/2007 Page 3 of 34 3. The respondent/DDA challenged the aforesaid decision of the Division Bench dated 30.01.1996 by preferring a Special Leave Petition in the Supreme Court in November 1996. The said Special Leave Petition was dismissed by the Supreme Court vide order dated 18.11.1996 and as a result, the decision of the Division Bench attained finality. However, as the respondent/DDA did not return the land to the appellants, the latter initiated contempt proceedings by filing CCP No.461/1996 in this Court on 16.12.1996, wherein the Commissioner (Land Management), DDA and the Vice Chairman, DDA were impleaded as respondents. On 19.02.1997, a fresh notification was issued by the Land and Building Department, Govt. of NCT of Delhi under Sections 4 and 17 of the Act, proposing to acquire the land of the appellants for the development of Vasant Kunj under the planned development of Delhi. 4. Simultaneously, on 26.2.1997, the Director (Land Management), DDA filed an affidavit in the contempt proceedings stating inter alia that the land in question was utilized in respect of a Housing Scheme known as Vasant Kunj Residential Scheme, but in view of the interim order passed by the Division Bench in Civil Writ Petition No.1134/1992, the land was maintained as a green area. It was further stated that in the composite plan, in respect of Vasant Kunj Residential Scheme, the land in question was earmarked for a police station and a higher secondary school and that it was not feasible for the DDA to return possession of the land to the appellants as the same was part of a huge Residential Scheme and further, that no alternate plot in a similarly situated area was available for allotment to the appellants. It was lastly submitted that the appellants would be paid market value of the land as obtaining on 19.02.1997, together with such other LA.APP. 149/2007 Page 4 of 34 amount as provided for under the Act. This was the triggering point for the second round of litigation in respect of the subject land. 5. Award No.2/98-99 dated 18.09.1998 came to be announced by the Land Acquisition Collector (LAC) in respect of the said land, whereunder the market value of the land was assessed according to the date of notification under Section 4 of the Act, i.e., 19.02.1997. As against the claim of the appellants for compensation @ `25,000/- per sq. yard, apart from solatium and interest, treating the land as agricultural land, the LAC applied the indicative price for agricultural land acquired by the Government as `10 lacs per acre to the appellants‟ lands, discounted @ 11.5% per annum compounded rate of interest and awarded compensation @ `2,05,642.07 paise per bigha (i.e., `205/- per sq. yards). For taking such a decision, the LAC took guidance from a notification issued by the Land and Building Department dated 25.07.1997, which provided that w.e.f. 01.04.1997, the indicative price of agricultural land acquired by the Government would apply to the land notified under Section 4 of the Act before 01.04.1997. He also observed that the appellants had not given any documentary evidence in support of their claim. In addition to the above, the LAC held that the appellants were entitled to 30% solatium and other benefits under the Act. The claim for compensation for the well and the structure was, however, turned down by the LAC and compensation in respect of trees on the land was directed to be paid later, by way of a supplementary award. The appellants were held entitled to additional interest @ 12% per annum on the market value of the land, i.e., `26,400/- per bigha and to solatium @ 30% on the market value of the land as per Section 23(2b) of the Act. In conclusion, the appellants were held entitled LA.APP. 149/2007 Page 5 of 34 to a total sum of `37,12,180.05 paise under the Award. 6. Aggrieved by the aforesaid Award, the appellants filed a reference petition under Section 18 of the Act before the Additional District Judge on 07.10.1998, which came to be decided by the impugned judgment dated 24.02.2007. On the basis of the pleadings of the parties, the learned ADJ framed the following seven issues on 2.11.1999 :- 1. What was the market value of the land, trees, in dispute at the time of Section 4 Notification date? 2. To what enhancement in compensation, the petitioners are entitled? 3. Whether there existed any well on the land in dispute, if so what was its market value? 4. Whether Collector has not complied with the provisions of Section 17(3)(A) of the Land Acquisition Act, if so whether the petitioners are entitled to interest from 19.02.1997 to date of payment? 5. Whether the petitioners are entitled to 12% additional amount u/S 23 (1)(A) of I.A. Act from 25.3.83 to 18.9.98 ? 6. At what rate and on what amount the petitioners are entitled to interest u/S 34 of the I.A. Act? 7. Relief. 7. In support of their case, the appellants filed certified copies of the proceedings of WP(C)No.1134/1992 and the contempt petition, bearing CCP No.461/1996 and the orders passed thereon by the High Court, as mentioned above. They also filed certified copies of four perpetual lease deeds of residential plots in Vasant Kunj executed during the period, September 1995 to December 1996, between DDA and private parties, tabulated as below : LA.APP. 149/2007 Page 6 of 34 Exh. Sale Date Plot No. Size (sq.mtr) Sale Price (`) Rate (`/sq.yd) A-7 22.09.95 59C 218.5 75,05,000 28,719 A-8 02.02.96 5C 220.0 96,55,000 36,695 A-9 02.02.96 8C 231.0 1,01,61,000 36,779 A-10 10.12.96 13C 242.0 1,37,60,000 47,542 8. On the other hand, the respondent/Union of India placed on record, true copies of Khasra Girdawaries of the subject land, for the years 1977-78 to 1980-81, 1986-87 to 1989-90, 1990-94 and 1994-98 (Ex.R-1 to R-4) and a copy of the letter dated 28.07.1997, issued by the Land and Building Department, Govt. of NCT of Delhi, fixing indicative price of agricultural land situated in river bed between the forward bunds (Ex.R-5). The sole witness examined by the respondent was Shri S.C. Chandana, Executive Engineer, SWD-IV, DDA(RW-1), who produced records pertaining to cost of development of residential plots in Sector C, Pocket 5, Vasant Kunj, New Delhi, including a layout plan indicating the plots of land mentioned in para 7 above, (Ex.DR-1/A). 9. After hearing both sides, the learned ADJ concluded that the rates of the specific pieces of land sold through public auction could not form the basis for determining the fair market value of the subject land and that while determining the prospective use of the land, its future potential and development could not be the only basis to determine the market value of the acquired land. Thus, while holding that auction of a developed plot by a public authority was not a proper guide for determining the fair market value of the acquired land, the lease deeds produced by the appellants were discarded. The learned ADJ then referred to a decision of the High Court in LA.APP. 149/2007 Page 7 of 34 a case entitled Nand Kishore vs. UOI reported as 73(1998) DLT 108, where the issue of enhancement in compensation of the land situated in village Mehrauli was decided. In the aforesaid case, the land in question was acquired vide notification dated 21.11.1978 issued under Section 4 of the Act and the High Court fixed the market value of the expropriated land @ `30,000/- per bigha. In another case, LAC No.484/1993, entitled V.K. Goel vs. UOI & Anr., the learned ADJ assessed the market value of the land situated in village Mehrauli, acquired vide notification under Section 4 of the Act dated 11.4.1988, at `44,014/-. Taking into consideration the indicative price for agricultural land w.e.f. 01.04.1997, as taken note of by the LAC in the Award, the learned ADJ observed that if escalation in price of the land on the amount of `30,000/- per bigha is calculated @ 12% p.a. from 21.11.1978 (the date of notification under Section 4 of the Act in the case of Nand Kishore (supra)) to 19.2.1997 (the date of notification under Section 4 of the Act in the present case), it would have come to `1,02,000/- (approximate) and if 12% p.a. is calculated on the amount of `44,014/- from 11.4.1988 (the date of Section 4 notification in the case of LAC No.484/1993) to 19.12.1997, it would have been `46,771/-. He, therefore, opined that the market value of the acquired land, based on the calculations in the aforesaid two cases, on 19.2.1997 would have been `90,785/- per bigha, but having regard to the fact that the LAC had already awarded `2,05,642.07 paise per bigha for the acquired land as on 19.02.1997, which was much higher than the compensation calculated by him at `90,785/- per bigha, the claim of the appellants for enhancement in compensation was turned down. Aggrieved by the aforesaid decision, the appellants have preferred the present appeal. LA.APP. 149/2007 Page 8 of 34 10. In the present appeal, the appellants have claimed market value of the land @ `1,04,702/- per sq. yard; solatium @ 30% on the market value; additional amount @ 12% on the market value for the period with effect from the date of issuance of Section 4 Notification, i.e., from 19.02.1997 till the date of Award, i.e., till 18.09.1998; interest @ 9% under Section 34 of the Act with effect from 19.02.1997, the date of issuance of Section 4 Notification to 18.02.1998, i.e., one year from the date of issuance of Section 4 Notification, and @ 15% from 19.02.1998 onwards till the date of payment. Interest on the excess amount under Section 28 of the Act has been claimed @ 9% from 19.02.1997 to 18.02.1998 and @ 15% from 19.02.1998 onwards till the date of payment. Appellants have also claimed damages on the market value of the plot @ 7% p.a. from 25.3.1983 to 24.3.1984 and @ 13% p.a. from 25.3.1984 to 19.2.1997, along with interest on damages @ 6% p.a. from 19.2.1997 till the date of payment. 11. It may be mentioned at the outset that part of issue No.1, pertaining to the market value of the trees, and issue No.3, pertaining to existence of any well on the land, have not been pressed by the appellants, and hence, findings returned in that regard by the learned ADJ need not detain this Court. Similarly, arguments were not addressed by the appellants on the findings returned under issue No.4, pertaining to entitlement of interest from 19.02.1997, under Section 17(3)(A) of the Act and hence, the findings returned by the learned ADJ in that regard need no discussion. Apart from the findings returned in the impugned judgment with regard to the market value of the land at the time of issuance of Section 4 notification, the appellants have challenged the findings returned with respect to issues No.5 & 6. Issue No.5 was framed with regard to LA.APP. 149/2007 Page 9 of 34 entitlement of the appellants, if any, to 12% additional amount under Section 23(1)(A) of the Act from 25.03.1983 to 18.09.1998 and was decided against them by holding that they were not entitled to the amount from the date of dispossession till the date of issuance of the second notification under Section 4 of the Act, i.e., from 25.03.1983 to 19.02.1997. The appellants have stated that in view of the judgment of the Supreme Court in the case of R.L. Jain vs. DDA & Ors., AIR 2004 SC 1904, which held that where possession is taken before issuance of notification under Section 4 of the Act, interest cannot be awarded for period anterior to publication of notification under Section 4 of the Act, however the appellants would be entitled to seek an additional amount under Section 23(1)(A) of the Act w.e.f. 19.2.1997 to 18.9.1998, and damages for the period w.e.f. 25.3.1983 to 18.2.1997, damages for use of the land @ 7% for the first year and thereafter, @ 13 % on the market value of the plot along with interest on damages @ 6 % p.a. from the date of Section 4 notification till date of payment. Issue No.6 was framed with regard to the rate of interest and the amount, if any, to which the appellants were entitled under Section 34 of the Act, which was also decided against them. 12. Appellant No.1, who appeared in person, and addressed arguments on behalf of all the appellants, raised the following grounds to assail the impugned judgment : (i) The said land should have been returned to the appellants in compliance with the judgment of the High Court dated 30.01.1996. (ii) The said land was wrongly graded as agricultural land and hence, compensation was not assessed on the basis of its true LA.APP. 149/2007 Page 10 of 34 market value. (iii) The evidence tendered by the respondents in support of the prevailing market value of the land was irrelevant, as it referred to sale of agricultural lands, whereasthe plot of land in question, situated in village Mehrauli, in which the residential colony Vasant Kunj has developed, was urban and residential in nature. (iv) The plot in question was fully developed and residential in nature and had all the civic amenities provided by MCD at the time of issuance of notification under Section 4 of the Act in February, 1997 and hence it was required to be assessed for compensation at urban rates and not at rural rates. (v) Certified copies of the four perpetual lease deeds (Ex.A-7 to Ex.A-10), placed on the record by the appellants to prove the prevailing market value of the land in Vasant Kunj at the time of issuance of the notification under Section 4 of the Act, were completely overlooked. (vi) No amount whatsoever has been granted to the appellants towards damages on the market value of the subject plot, w.e.f. 25.3.1983, the date when the first notification under Section 4 of the Act was issued, till 19.2.1997, the date of issuance of the second notification, in terms of the judgment of the Supreme Court in the case of R.L. Jain vs. DDA (AIR 2004 SC 1904). 13. The appellant No.1 stated that for determination of the market value of the acquired plot of land, they had filed copies of four perpetual lease deeds which were executed during the period, September 1995 to LA.APP. 149/2007 Page 11 of 34 December 1996, well near about the time when the Section 4 Notification dated 19.2.1997 was issued. To urge that the said lease deeds ought to have formed the basis for ascertaining the true market value of the land on the date of the notification, he referred to the decisions in the cases of Jawajee Nagnatham vs. Revenue Divisional Officer, Adilabad, A.P. and Ors, (1994) 4 SCC 595 and U.P. Jal Nigam, Lucknow (Through its Chairman) & Anr. vs. Kalra Properties (P) Ltd., Lucknow, (1996) 3 SCC 124 (Para 5). He stated that a perusal of the aforesaid lease deeds reflects a consistent escalation in the price of land in Vasant Kunj, at a flat rate of 52% per annum, and considering the fact that they satisfied all the seven parameters laid down by the Supreme Court for assessing market value of acquired land, which include proximity of location, proximity of time, possession of similar advantages, bona fide transaction, etc., the learned ADJ was wrong to overlook these factors while arriving at the fair market value of the acquired land. To support his submissions, reference was made to the following judgments : i. Shri Rani M. Vijayalakshmamma Rao Bahadur vs. Collector of Madras, (1961) 1 MLJ SC 45 (para 2) ii. The State of Punjab vs. Inder Singh, 1969 (LXXI) PLR 1034 (para 6) iii. Jogendra Nath Chatterjee & Ors. vs. State of West Bengal, AIR 1971 Calcutta 458 (V 58 C 103) (Head Note „C‟) (para20) iv. Land Acquisition Collector, Punjab State Electricity Board, Patiala vs. Aditya Kumar & Ors., 1984 (LXXXVI) PLR 540 (para 1) LA.APP. 149/2007 Page 12 of 34 v. Rameshwar Solanki vs. UOI, AIR 1995 Delhi 358 (both on proximity of location/exact market value of the land) 14. The appellants stated that as compared to their land which was freehold in nature and would have fetched a far better price in the open market, the terms and conditions laid down in the perpetual lease deeds are far more stringent in nature and have a restricting effect on their market price. Reliance was placed on a decision of the Division Bench of this Court in the cases of Jas Rath vs. UOI, reported as 95 (2002) DLT 605 (DB) (para 20) and a decision of the Supreme Court in the case of UOI, through Secretary, Ministry of Home Affairs, GOI, New Delhi & Ors. vs. A. Ajit Singh reported as (1997) 6 SCC 50, to submit that the price relationship between freehold property and leasehold property is 2:1 for residential plots. 15. The layout plan of Vasant Kunj drawn out in March 1987, produced by RW-1 as Ex.DR1/A, was also relied upon by the appellant No.1 to submit that the same clearly shows that the acquired land had been earmarked for a higher secondary school/police station. He contended that if in the year 1987 itself, the land was shown as earmarked for the aforesaid purpose, then the argument of the respondent that on the date of issuance of Section 4 notification, in February 1997, the plot was agricultural in nature was contrary to the records, more so when originally the said land was acquired on 25.3.1983 and continued to remain in the possession of the respondents thereafter. 16. In support of his submission that the LAC committed a patent error in treating the subject land as agricultural in nature and in taking recourse to the Government evaluation register/circle rates as reflected in LA.APP. 149/2007 Page 13 of 34 the notification dated 25.7.1997 issued by the Land & Building Department, which provided that w.e.f. 1.4.1997, the indicative price of agricultural land acquired by the Government would apply to land notified under Section 4 of the Act before 1.4.1997, the appellant No.1 relied upon the following judgments : i. Jawajee Nagnatham vs. Revenue Divisional Officer, Adilabad, (1994) 4 SCC 595 (para 5) ii. Land Acquisition Officer, Eluru & Ors. vs. Jasti Rohini (Smt.) & Anr., (1995) 1 SCC 717 (Head note „D‟) iii. U.P. Jal Nigam, Lucknow (Through its Chairman) & Anr. vs. Kalra Properties (P) Ltd., Lucknow, (1996) 3 SCC 124 (Para 5) iv. Ranvir Singh & Anr. vs. UOI, (2005) 12 SCC 59 (Head Note „C‟) (Para 24) 17. It was urged on behalf of the appellants that the nature of the said land had changed from rural to urban and as the land in the area had been converted to developed area through a special Gazette notification, its character on the date of issuance of Section 4 notification was fully developed and residential in nature. [(Refer : Delhi Development Authority vs. Land Acquisition Collector & Anr. (130) 2006 DLT 1 (DB)]. 18. On the other hand, Mr. Sanjay Poddar, Advocate, who appeared for respondent No.1/Union of India, supported the impugned judgment and submitted that the learned ADJ had rightly rejected the documentary evidence produced by the appellants seeking enhanced compensation namely, the certified copies of four perpetual lease deeds (Ex.A-7 to Ex.A- 10) executed by the DDA in respect of residential plots measuring between LA.APP. 149/2007 Page 14 of 34 218.5 to 242 sq. meters, on the ground that the acquired land in question was surrounded by the area developed by DDA out of its own resources and it was much larger in dimension as compared to the parcels of land covered by the aforesaid perpetual lease deeds, and further, it was being maintained as a green area on the date of the notification. It was emphasized that small plots in a developed area could not be compared with a large undeveloped plot for calculation of market value. He further submitted that the principles for determination of compensation were well settled and the prices reflected in the perpetual lease deeds could not be taken as reflecting the representative price for the subject land, which was undeveloped. 19. Counsel for respondent No.1 pointed out that a status quo order had been operating in WP(C) No.1134/92 filed by the appellants challenging the earlier acquisition proceedings, which was ultimately allowed vide order dated 30.1.1996, and that right through the said proceedings, the land was maintained as a green area, which was a fact also borne out on a perusal of para 5 of the affidavit filed by the DDA in the contempt proceedings initiated by the appellants. The stand of the respondents was that as a result of the said status quo order, no development activity could be undertaken on the acquired land which retained its character of an agricultural piece of land, in the midst of Vasant Kunj which was developed by the DDA. The application of the notification issued by the Land & Building Department dated