1 901 fa 758.88 ors.doc ndm IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION FIRST APPEAL NO. 758 OF 1988 The Indian Standard Metal Company Ltd. ... Appellant Versus The Special Land Acquisition Officer, Panvel. ... Respondent ALONGWITH FIRST APPEAL NO. 12 OF 1996 WITH CROSS OBJECTION (stamp) NO. 9222 OF 2011 The State of Maharashtra. ... Appellant Versus Gajanan Kanu Pardeshi and others. ... Respondents ALONGWITH FIRST APPEAL NO. 475 OF 1997 WITH CROSS OBJECTION (stamp) NO. 22954 OF 2010 The State of Maharashtra. ... Appellant Versus Ambaji Dharma Pardeshi and others. ... Respondents ----- Mr. P.P.Chavan and Mr. R.R.Chile for the Appellant in FA No. 758 of 1988. Mr. A.R.Patil, AGP for the State of Maharashtra in all appeals. Mr. Rajiv Patil for the Respondents in FA No.12 of 1996 and in FA No. 475 of 1997. ----- 2 901 fa 758.88 ors.doc CORAM : A.S.OKA, J. DATE : 08 th April, 2011. ORAL JUDGMENT: 1 These appeals can be disposed of by a common judgment. The challenge in these appeals is to the awards under Section 18 of the Land Acquisition Act, 1894 (hereinafter referred to as “the said Act”). The acquired lands are situated at village Wadghar, Taluka Panvel, District Raigad, which were notified on 3 rd February, 1970 under Section 4 (1) of the said Act for the public purpose of setting up satellite city of New Bombay. 2 As far as First Appeal No. 758 of 1988 is concerned, the Appellant is the claimant in the reference under Section 18 of the said Act. In this case, the award under Section 11 was made on 22 nd February, 1985. The market value offered was not accepted by the Appellant and hence, a reference under Section 18 of the said Act was made. The claim made in the reference under Section 18 was for market value at the rate of Rs.15/- per square meter. The Reference Court by 3 901 fa 758.88 ors.doc the impugned award granted 70% increase in the market value offered by the award under Section 11 of the said Act. Thus, the Reference Court determined the average market value at the rate of Rs.1.86 per square meter. The present appeal is preferred by the Appellant claiming market value at the rate of Rs.15/- per square meter. It must be noted here that by the judgment and order dated 3 rd July, 2001, a Division Bench of this Court allowed the present appeal and granted enhancement. The Division Bench fixed the market value at the rate of Rs.12.50 per square meter. The Division Bench came to the conclusion that the deduction of 20% will have to be made on account of development charges. 3 As far as First Appeal No. 12 of 1996 is concerned, the appeal is filed by the State Government. The claim made in a reference under Section 18 of the said Act was for additional compensation of Rs. 7.50 per square meter. This was in addition to the market value offered by the Special Land Acquisition Officer. By the impugned award, the Reference Court fixed the market value at the rate of Rs.7.50 per square meter. In this appeal, there is a cross objection filed by the Respondents 4 901 fa 758.88 ors.doc – claimants claiming market value at the rate of Rs.12/- per square meter. 4 First Appeal No. 475 of 1997 is preferred by the State Government. The claim made in a reference under Section 18 by the Respondents – claimants was at the rate of Rs.20/- per square meter. By the impugned award, the market value has been fixed at the rate of Rs. 15/- per square meter. There is a cross objection filed seeking market value at the rate of Rs.20/- per square meter. 5 As far as judgment in First Appeal No. 758 of 1988 is concerned, the State Government carried the matter to the Apex Court by filing Civil Appeal No. 368 of 2004. The Apex Court has set aside the order of the Division Bench and has remitted the appeal to this Court for fresh consideration. The Apex Court while passing the order of remand has observed that this Court ought not to have given undue importance to sale instances in respect of small plots of land. The Apex Court observed that the Reference Court was right in stating that the purchase price of the land paid by the Appellant – claimant was an important factor 5 901 fa 758.88 ors.doc in determining the market value of the acquired land. The Apex Court noted that the market value at which the Appellant – claimant acquired land in the year 1964-65 was ranging from Rs.0.45/- to Rs.0.75/- per square meter. 6 The learned counsel appearing for the Appellant In First Appeal No. 758 of 1988 has made detailed submissions. He has pointed out that vast tracts of lands in 96 villages in Thane and Raigad districts were notified for acquisition for the same public purpose from the years 1968 to 1972. He pointed out that various decisions of this Court by which market value of various villages forming part of the 96 villages has been fixed by this Court. He has placed reliance on several decisions of the Division Bench as well as the Single Judge of this Court. He has also placed reliance on a recent judgment of the Apex Court in the case of Avinash Dhavaji Naik Vs. State of Maharashtra, (2009) 11 Supreme Court Cases 171. He submitted that considering the market value fixed by this Court in respect of the adjoining villages, the claim made by the Appellant at the rate of Rs.15/- per square meter will have to be accepted. 6 901 fa 758.88 ors.doc In support of First Appeal No. 475 of 1997 and First Appeal No.12 of 1995, the learned AGP submitted that the market value fixed is excessive. He pointed out that in First Appeal No.758 of 1988, the Division Bench of this Court fixed the market value at the rate of Rs.12.50 per square meter and a deduction of 20% was ordered to be made. He thus pointed out that a deduction of Rs.2.50 per square meter was ordered to be made from the rate fixed at Rs.12.50 per square meter and thus the market value was fixed at the of Rs.10/- per square meter. He submitted that as the decision of the Division Bench has been set aside, the market value will have to be fixed at a rate of which is less than Rs.10/- per square meter. The learned counsel appearing for the Respondents – claimants in the said appeals has submitted that the minimum market value will have to be fixed at the rate of Rs.20/- per square meter. 7 I have given careful consideration to the submissions. It will be necessary to make a reference to the decision of the Apex Court in the case of Avinash Dhavaji Naik (supra). The Apex Court dealt with the appeal preferred by the claimants arising out of reference under Section 7 901 fa 758.88 ors.doc 18 of the said Act in relation to land admeasuring 5300 square meter situated in village Wahal, Taluka Panvel, District Raigad, which was notified on the same day, i.e. 3 rd February, 1970 for the same public purpose of setting up satellite city of New Bombay. Market value was awarded by the Reference Court at the rates of Rs.6/- and Rs.10/- per square meter. In appeal, this Court fixed the market value to Rs.7/- per square meter. The Apex Court in the said decision noted that vast tracts of lands situated in 96 villages were sought to be acquired at the same time for the construction of twin city of New Bombay. Paragraph Nos.11 to 15 of the decision of the Apex Court read thus: “11. The purpose for acquisition of land was building a new city. A vast tract of land was sought to be acquired. Indisputably, in terms of Section 23 of the Act, the market value of the land was required to be determined as was obtaining in the year 1970 when the notification under Section 4 of the Act was issued. It is unfortunate that despite the fact that Notification was issued under Section 4 of the Act as far back as on 3-2-1970 and a declaration under Section 6 of the Act was issued on 21-5-1971, the award came to be passed only on 30-6-1986 and that too probably, only having regard to the consequences ensuing in terms of Section 11-A of the Act. 12. A finding of fact was arrived at by the learned Reference Judge that no sale instance was available for the lands situated in the village Wahal and there was no industrial or commercial development therein. The Pune-Bombay Highway was constructed in the year 1978. The MIDC pipeline was constructed in the year 1978. There was no railway station nearby the village. 8 901 fa 758.88 ors.doc The villagers did not obtain any electricity connection. The land was a grassy land. In the absence of any example of sale being available, the Reference Court was required to take recourse to other methods of valuation. We do not find that enough materials had been brought on record to establish the yield of the lands sought to be acquired, which are admittedly agricultural in nature. In all fairness, the State should have brought on record the requisite information viz. the nature of the crop, the annual average yield, availability of irrigation facilities, etc. so as to enable the Reference Court to arrive at a correct decision in regard to grant of compensation under the Act. 13. Although the lands in question were agricultural in nature, they were being used for making a town like Bombay. A new port known as Nhava Sheva Port had come into being which is a few kilometers away from the village. The roads were being constructed. The road to Nhava Shiva Port from Bombay is a district board road which is within 7 km from the village in question. A copy of the New Bombay Development Plan has been placed before us to point out construction of the national highway i.e. Bombay-Pune Road as also the other district board roads. 14. The potentiality of a land for the purpose of development as also for building purposes would depend upon a large number of factors. For the said purpose, the court may not only have to bear in mind the purpose for which the lands were sought to be acquired but also the subsequent events to some extent. 15. In a case of this nature the court may proceed on the presumption that such a vast tract of land viz. 96 villages were sought to be acquired at the same time for construction of New Bombay. We are not unmindful of the fact that development in the entire area was not possible at one point of time. Development of the area must have taken place in phases. We are also not unmindful of the fact that the price of the land may skyrocket depending upon the development as also future potentiality.” (underlines supplied) 9 901 fa 758.88 ors.doc 8 The Apex Court also noted that as far as village Wahal is concerned, at the relevant time in the year 1970, there was no railway station nearby the village and there were no electricity connections in the village. The acquired land was a grassy land. The Apex Court also noted that there were no sale transactions in the village. The Apex Court also noted that there was no material to establish the yield from the land acquired. 9 What is important is that the Apex Court observed that while fixing the market value, the Court will have to bear in mind not only the purpose for which the lands were sought to be acquired, but also subsequent events to some extent. 10 The Apex Court also noted the decisions of the Division Bench of this Court in respect of the lands situated at village Kamothe and Panvel, which were notified on the same day for the same public purpose in which the Division Bench has adopted belting system for 10 901 fa 758.88 ors.doc fixing the market value on the basis of its distance from Bombay – Pune National Highway and Zilla Parishad road. The Apex Court observed that the distance between the village Wahal and Panvel was 9 kilometers. In paragraph No.21, after noting the said distance, the Apex Court reiterated that Panvel was a municipal area and the village Wahal was governed by a Village Panchayat. On the relevant date, even the electricity had not reached to the village Wahal. Even after taking into consideration all aforesaid circumstances, the Apex Court came to the conclusion that the market value of the lands at village Wahal on the relevant date was Rs. 10/- per square meter. The Apex Court also noted that within a span of 16 years from 1970 to 1986, a lot of development had taken place in the area of New Bombay. 11 In First Appeal No. 758 of 1988, oral evidence of Mr.Bhalchandra Shantaram Sule has been recorded. He has noted that the acquired land at village Wadghar was at a distance of 1 to 1 and ½ kilometers from the Panvel town. It must be noted here that the total area of the lands subject matter of the said appeal is 2, 13, 150 square meters. 11 901 fa 758.88 ors.doc The witness further stated that Panvel – Uran road, which is a State highway was at a distance of 500 meters from the acquired land. In fact, it is stated that railway line between the Panvel and Uran passed through the acquired land by which the acquired land has been divided. The witness has deposed regarding various facilities available in Panvel. The witness has been cross-examined by the learned Government Pleader in which there is hardly any challenge as regards the location of the village and the acquired land. There is no cross-examination made on the aspect of the distance between the village Wadghar and Panvel. The claimants also examined Mr.Jeevan Narayan Kulkarni, a valuer, who also deposed that Panvel town was at a distance of 1.5 kilometers from village Wadghar. As far as the distance between the acquired land and Bombay – Pune National Highway is concerned, he stated in the cross- examination that the same was 2 kilometers. 12 As far as the First Appeal No. 475 of 1997 is concerned, the area of the acquired lands is 19800 square meters. As far as First Appeal No.12 of 1996 is concerned, the area of the acquired land subject 12 901 fa 758.88 ors.doc matter is 4375 square meters. 13 As stated earlier, in respect of the land admeasuring 5600 square meters situated at village Wahal, which was notified on the same day for the same public purpose, the Apex Court fixed the market value at the rate of Rs.10/- per square meter. The learned AGP has placed on record for perusal of the Court the development plant of the city of New Bombay. Even the Apex Court has noted that the village Wahal is at a distance of 9 kilometers from the municipal limits of the Panvel. The evidence on record shows that the village Wadghar was at a distance of 1.5 kilometers from the Panvel. It must be noted here that under the decision of the Division Bench of this Court dated 12 th June, 2008 in First Appeal No.604 of 1995 (The State of Maharashtra Vs. Prakash V. Deodhar) and other connected appeals, the market value of the acquired lands at village Panvel and adjoining village Kamothe has been fixed on the basis of the distance of the acquired lands from the Bombay – Pune National Highway. In case of lands within a distance of 750 meters from the National Highway, the market value has been fixed at the rate of Rs. 13 901 fa 758.88 ors.doc 25/- per square meter. In case of the lands, which were at a distance of more than 1500 meters from the national highway, the market value has been fixed at the rate of Rs.21/- per square meter. Of course, this Court was dealing with the lands at village Panvel within the municipal limits. In the present case, the expert witness Mr.Jeevan Narayan Kulkarni has given approximate distance of the acquired lands from the national highway as 2000 meters. In case of village Ulve, which is in between village Wadghar and village Wahal, this Court has consistently fixed the market value at the rate of Rs.12/- per square meter as of 3 rd February, 1970 in respect of the lands which were acquired for the same public purpose. 14 As stated earlier, considering the acquisition of vast tracts of lands situated in 96 villages, there were no sale transactions in the villages concerned and a judicial notice of this fact has been taken by the Apex Court in the aforesaid decision in the case of Avinash Dhavaji Naik (supra) relating to village Wahal. As far as the Appellants in First Appeal No. 758 of 1988 are concerned, they purchased the acquired lands in the 14 901 fa 758.88 ors.doc year 1964. In the present case, were are dealing with the market value as of 3 rd February, 1970. As of the year 1970, there were no sale transactions in the villages. In absence of sale transactions in the same village, for fixing the market value, instances of the comparable lands situated in the adjoining villages or similarly situated villages can be always considered. The said proposition of law is laid down in various decisions of the Apex Court including the decision in the case of O.N.G.C. Ltd. Vs. Sendhabhai Vastram Patel & Ors, [(2005) 6 SCC 454]. 15 Looking to the close proximity of village Wadghar to Panvel town as compared to distance between village Wahal and Panvel, the market value of the acquired lands will certainly exceed a sum of Rs.10/- per square meter, which is fixed by the Apex Court in the case of the lands in village Wahal. As stated earlier, in respect of village Ulve, this Court has fixed market value of Rs.12/- per square meter. Village Ulve as seen from the map produced by the learned AGP is close to village Wahal and is far away from Panvel as compared to village Wadghar. The 15 901 fa 758.88 ors.doc State Government has accepted the decisions of this Court in case of village Ulve. The village Panvel is on the eastern side of village Wadghar and the village Ulve is on the western side of village Wadghar. In the circumstances, the market value of the lands at village Wadghar can be reasonably taken at Rs.12/- per square meter. 16 As far as the lands subject matter of First Appeal No. 758 of 1988 is concerned, the area of the acquired lands is very vast. Therefore, appropriate deduction will have to be made on account of cost of development and on account of the fact that the market value of very large land is being fixed on the basis of the rate fixed by the Apex Court in respect of the land at village Wahal admeasuring 5300 square meters. Therefore, as far as lands subject matter of First Appeal No. 758 of 1988 is concerned, by making a reasonable deduction, the market value will have to be fixed at the rate of Rs.10/- per square meter similarly, in respect of the First Appeal No.475 of 1997 relates to land admeasuring 1,98,800 square meters, the market value will have to be fixed at Rs.10/- per square meter. In case of First Appeal No. 12 of 1996, the area of the 16 901 fa 758.88 ors.doc land is 4375 square meters. Hence, the market value will have to be fixed at Rs.12/- per square meter by allowing the cross-objection. 17 Hence, I pass the following order: FIRST APPEAL NO. 758 OF 1988 i. First Appeal No. 758 of 1988 is partly allowed and the market value of the acquired land is fixed at the rate of Rs.10/- per square meter ; ii. In addition to the market value, the Appellants shall be entitled to statutory benefits under Section 23 (1-A), Section 23 (2) and Section 28 of the said Act ; iii. The Appellants will be entitled to proportionate costs of the reference as well as the first appeal from the State Government ; FIRST APPEAL NO. 12 OF 1996 with CROSS OBJECTION (stamp) NO. 9222 OF 2011 iv. First Appeal No. 12 of 1996 is dismissed with no order as to costs ; v. Cross Objection (stamp) No. 9222 of 2011 is partly allowed ; vi. Market value is fixed at the rate of Rs.12/- per square meter ; 17 901 fa 758.88 ors.doc vii. In addition to the market value, the Appellant shall be entitled to statutory benefits under Section 23 (1-A), Section 23 (2) and Section 28 of the said Act ; viii. The claimants will be entitled to proportionate costs of the reference as well as the cross objection ; FIRST APPEAL NO. 475 OF 1997 with CROSS OBJECTION (stamp) NO. 22954 OF 2010 ix. First Appeal No. 475 of 1997 is partly allowed. The market value is brought down to Rs.10/- per square meter from Rs.15/- per square meter ; x. Cross-objection (stamp) No. 22954 of 2010 is dismissed ; xi. Rest of the award is not disturbed ; xii. In all the aforesaid cases, the determination of the market value on the basis of the modified awards shall be made by the Reference Court within a period of three months from the date on which writ of this judgment is received by the said Court. [ A.S.OKA, J ]