IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 16.06.2010 CORAM : THE HON'BLE MR.JUSTICE P.R.SHIVAKUMAR A.S.No.455 of 2001 and C.M.P.7216 of 2001 Union of India, rep. by Deputy Collector (Rev.)-Cum- Land Acquisition Officer, Pondicherry ... Appellant/Respondent Vs. D.Kannagi, rep. by Power of Attorney Diderot Easwara Gnanayadam 27, II Cross, Vivekananda Nagar Pondicherry ... Respondent/Petitioner Appeal filed under Section 54 of the Land Acquisition Act, 1894 against the award passed in LAOP No.19/93 Dt.26.02.1999 by the Principal District Judge, Pondicherry. For Appellant : Mr.R.Natarajan, Govt. Pleader (Pondicherry) For Respondent : G.C.Santhanakrishnan JUDGMENT This appeal has been filed by the Referring Officer in L.A.O.P.No.19/1993 on the file of the Principal District Judge, Pondicherry seeking reduction of the enhanced compensation awarded by the said court in its award dated 26.02.1999. Among other properties, an extent of 0.10.00 hectare classified as dry land comprised in survey No.1702/2 in Oulgaret village, Pondicherry (now Puducherry) was acquired for the purpose of widening the Pondicherry-Tindivanam main road. After award enquiry, the Land Acquisition Officer, namely the Deputy Collector (Revenue) passed an award fixing the market value of the acquired land as on the date of 4(1) notification at Rs.8,547/- per hectare = Rs.854.70 per Are. 25 coconut trees found in the said land acquired by the government was valued at Rs.250/- @ Rs.10/- per tree. The learned https://hcservices.ecourts.gov.in/hcservices/ Deputy Collector (Revenue)/Land Acquisition Officer also awarded a sum of Rs.1319.55P as solatium calculated @ 15% on the market value and thus fixed the total amount of compensation payable to the person interested in the above said land comprised in survey No.1702/2, which was acquired for the above said purpose. As there was a problem for the Land Acquisition Officer in fixing the person entitled to receive the compensation, he made a reference to the court under section 30 of the Land Acquisition Act, 1894 showing some other persons including the husband of the respondent herein/claimant as the persons interested in the said reference. The same was taken on file as L.A.O.P.No.9/1978. The award of the Land Acquisition Officer was passed in award No.9/78 dated 31.03.1978. Diderot Anandan, Diderot Easwaran Gnanayutham, Diderot Jagadeeswaran, Diderot Sivanandam, Diderot Paramasivam, Diderot Parameswaran and Diderot Parameswarani were shown to be the respondents/interested persons in the said reference. Meanwhile, the respondent herein/claimant sent a petition to the Land Acquisition Officer contending that it was she, who was the person solely entitled to the acquired land and thus entitled to receive the compensation in its entirety and that she wanted a higher compensation than what was fixed by the Land Acquisition Officer. As such, the reference concerned in this appeal was made by the Land Acquisition Officer to the court under section 18 of the Land Acquistion Act, 1894. The same was initially taken on file as L.A.O.P.No.136/1978 on the file of the Principal District Judge, Pondicherry. Subsequently, the same was re-numbered as L.A.O.P.No.19/1993 and was disposed by the learned Principal District Judge, Pondicherry by his award dated 26.02.1999, which is the subject matter of challenge in the present appeal. 2. In the court below, the power agent of the claimant was examined as P.W.1 and Exs.A1 to A4 were marked on the side of the claimant. The Deputy Collector (Revenue)/Land Acquisition Officer was examined as D.W.1 and Exs.B1 to B7 were marked on the side of the Referring Officer. The learned Principal District Judge, at the conclusion of the trial, upon considering the materials placed before him, chose to fix the market value of the acquired land @ Rs.5,604/- per Are. A sum of Rs.5,000/- was added as the value of trees. The learned Principal District Judge also awarded a solatium @ 30% of the market value and additional value calculated @ 12% per annum from the date of 4(1) notification till the date of award and thus arrived at a figure Rs.89,647/- as the total amount of compensation to which the claimant was entitled. The learned Principal District Judge also allowed an interest on the enhanced amount of compensation at the rates specified under Section 28 of the Land Acquisition Act, 1894 for the period subsequent to 02.11.1993. Interest for the period prior to 02.11.1993 was disallowed on the premise that the LAOP, which was initially taken on file as LAOP No.136/1978 in December 1978 was dismissed for default on 11.04.1979, which came to be restored and re-numbered as LAOP No.19/1993 only on 02.11.1993. https://hcservices.ecourts.gov.in/hcservices/ 3. Contending that the amount fixed by the learned Principal District Judge, Pondicherry as the market value is highly excessive and exorbitant and praying for the reduction of compensation to the amount awarded by the Land Acquisition Officer, the appellant/Referring Officer has brought forth this appeal on various grounds set out in the Memorandum of Appeal. 4. The point that arises for consideration in this appeal is, "whether the market value of the acquired land fixed by the court below and consequently the amount awarded by the court below as enhanced compensation are excessive requiring downward revision?" 5. The arguments advanced by Mr.R.Natarajan, learned Additional Government Pleader (Pondicherry) and by Mr.G.C.Santhanakrishnan, learned counsel for the respondent were heard. The entire materials available on record were perused. 6. The Land Acquisition Officer initially selected two sale deeds, one in respect of a wet land and another in respect of a dry land, as the basis for fixing the market value of the acquired land, depending upon the classification of the land acquired. A sale deed dated 18.01.1968 registered as document No.124/1968 was taken as the sample sale for fixing the market value of the lands acquired under the scheme for expansion of the road, which stood classified in the revenue records as wet land. A sale deed dated 29.01.1969 registered as document No.43/1969 on 30.01.1969 was taken as the sample sale for fixing the market value of those portions of the acquired land which stood classified as dry land. However, when such a proposal for fixing two different rates for lands classified as wet land and dry land respectively, was returned by the government stating that the lands proposed to be acquired for widening the road were situated in a stretch of over 1 K.m in length it might not be proper to apply uniform rates for all the lands falling under the area of acquisition. Thus the Land Acquisition Officer was asked to reconsider the proposal by dividing the entire stretch into sectors for the purpose of determining the market value of different portions of land under acquisition. Thereafter, the Land Acquisition Officer, on reconsideration came to the conclusion that though the lands acquired were situated on either side of the road in a stretch of about 2 K.ms, the state of the fields under acquisition on ground were more or less uniform as they touch the Pondicherry-Tindivanam main road and hence decided to apply uniform rate as market value for the entire stretch of land under acquisition. The Land Acquisition Officer also took the view that since the lands were having equal amenities and were in equal proximity to the residential area and are also bounded on one side by the industrial estate and on the other side by the Jipmer complex coupled with the fact that all the stretches of land acquired were abutting the main road, decided to apply uniform rate as market value irrespective of their classification https://hcservices.ecourts.gov.in/hcservices/ into dry or wet land. However, the Land Acquisition Officer chose to prefer the rate applicable to the dry land as reflected in sale deed dated 29.01.1969 and rejected the rate reflected in the sale deed dated 18.01.1968 as wet land. 7. On a reference under Section 18 of the Land Acquisition Act having been made to the court below, the learned Principal District Judge fixed the market value of the acquired land @ Rs.3,000/- per kuzhi (Rs.5,604/- per Are). The said market value is not the one reflected in any one of the sale deeds produced either by the claimant or by the Referring Officer. On the other hand, the learned Principal District Judge made a reference to an entry as item 15, found in the sales statistics by the Land Acquisition Officer, which refers to a sale dated 08.06.1970 under a document registered as document No.1543/1970 on 09.06.1970, wherein a pucca house site was sold at Rs.961.44P per Kuzhi and chose to assume that there could have been more than three fold escalation of the market price within eight years and thus arrived at a conclusion that the market value of the acquired land as on the date of 4(1) Notification could reasonably be fixed at Rs.3,000/- per kuzhi. 8. The said approach made by the learned Principal District Judge is attacked by the appellant/Referring Officer on the following grounds:- a) First of all the court below committed an error in relying on an entry in the sales statistics collected by the Land Acquisition Officer, which was not relied on by the Land Acquisition Offcer, when not even an authenticated copy of the sale deed was produced. b) The court below failed to realise that LAOP filed on a reference made under Section 18 of the Land Acquisition Act, 1894 is not an appeal against the award of the Land Acquisition Officer; that the same is akin to a suit wherein the claimant occupies the position of the plaintiff and the Referring officer occupies the position of the defendant and that in the absence of any reliable evidence adduced by the claimant or admission on the part of the Referring Officer, the claim for enhanced compensation is bound to be rejected. c) Even assuming that sl.no.15 found in the sales statistics collected by the Land Acquisition Officer marked as Ex.B3 shall amount to an admission that a land, as house site, in the vicinity of the land under acquisition was sold at Rs.961.44/- per kuzhi, the learned Principal District Judge should not have fixed a higher rate than the same in the absence of any evidence on the side of the claimant to the effect that there was escalation of the market value of the property around the land under acquisition more than three fold from 1970 till the date of 4(1) notification. https://hcservices.ecourts.gov.in/hcservices/ d) The learned Principal District Judge also failed to notice the fact that the date of the sale referred to in Sl.No.15 of the sales statistics was just below about three months prior to the date of notification under section 4(1) of the Land Acquisition Act, 1894 and before four months from the date of publication of errata. Such an escalation more than three fold within three or four months cannot be even dreamt of. 8. The learned Principal District Judge seems to have acted on the assumption that the market value should be fixed with reference to the date of award rather than the date of 4(1) notification. 9. The learned Additional Government Pleader (Pondicherry) taking through the relevant portion of the award of the court below, has stated and reiterated the above said points of attack challenging the award of the court below. 8. This court finds force and substance in the above said contention raised by the learned Additional Government Pleader (Pondicherry) representing the appellant/Referring Officer. The award of the court below exhibits the tendency on the part of the learned Principal District Judge, Pondicherry to treat the LAOP registered on the basis of a reference under Section 18 of the Land Acquisition Act as an appeal from the award passed by the Land Acquisition Officer. Such an assumption is erroneous in the light of the emphatic pronouncement of the principle of law governing a reference under section 18 of the Land Acquisition Act, 1894 by the Hon'ble Supreme Court in Union of India vs. Special Land Acquisition Officer reported in 1996(6) SCC 454, in Special Deputy Collector vs. Kurra Sambasiva Rao reported in 1997(6) SCC 41, in Uttar Pradesh Jal Nigam, Lucknow vs. Kalra Properties Private Limited reported in (1996) 3 SCC 124 and Manipur Tea Company Private Limited vs. Collector of Hailakandi reported in (1997) 9 SCC 673. In Union of India vs. Special Land Acquisition Officer reported in 1996(6) SCC 454 it has been held that the award of the collector is an offer made on behalf of the State, and that therefore, under law, the State cannot question the correctness of the award determined by the Land Acquisition Officer. In Special Deputy Collector vs. Kurra Sambasiva Rao reported in 1997(6) SCC 41, the Hon'ble Supreme Court has held that the burden of proof to establish that the land is capable of fetching higher market value is always on the claimants. In Uttar Pradesh Jal Nigam, Lucknow vs. Kalra Properties Private Limited reported in (1996) 3 SCC 124 the Hon'ble Supreme Court has held that the market value shall be determined only on the basis of the evidence adduced by the https://hcservices.ecourts.gov.in/hcservices/ claimant and rebuttal evidence adduced thereof by the State and that determination based on Valuation Register maintained under Stamp Act, for collection of stamp duty, is not proper. 10. In this case, the claimant besides examining the power agent of the claimant as P.W.1 has produced only four documents. Ex.A1 is the power of attorney authorising P.W.1 to conduct the case on behalf of the claimant. Ex.A2 is a photocopy of an order passed by the Pincipal District Judge, Pondicherry in LAOP No.7/1988. The same is nothing but an order passed in respect of the property under acquisition concerned in this appeal made under section 30 of the Land Acquisition Act, 1894. The said order was passed on 20.12.1990 directing that the entire amount of compensation for the land under acquisition concerned in this appeal should be paid to the power agent of the respondent herein/claimant. That was the only question decided in the said LAOP. Therefore, Exs.A1 and A2 are not the documents, which may lend any help in determining the market value of the land under acquisition as on the date of 4(1) notification. Ex.A4 is a copy of an order dated 01.02.1988 passed by the competent authority under Urban Land (Ceiling and Regulation) Act, 1976. A total extent of 1.26.50 hectares comprised in survey No.1702 of Thattanchavadi village, Oulgaret commune, Pondicherry was owned by the claimant, out of which 0.10.00 hectares under acquisition concerned in this case was deducted to arrive at the total extent of the vacant land held by the claimant for the purpose of Urban Land Ceiling Act. Taking into account the said fact of acquisition of 0.10.00 hectares for expansion of the road, the competent authority declared that 1.00.00 hectare land in the above said survey number was the surplus land which had got to be surrendered to the government under the Urban Land Ceiling Act. Compensation under the said Act was also not fixed. Therefore it is obvious that the said document does not render any help to the court to determine the market value of the land under acquisition concerned in this appeal. Then a question may arise as to why such a document was allowed to be produced and how the said document is relevant. The answer is that the said document was permitted to be produced as a piece of evidence showing that the land under acquisition concerned in this appeal was classified as "industrial use existing" as per the master plan in force in the urban agglomeration of Pondicherry. To the extent of proving that the property under acquisition concerned in this appeal was not a mere dry land or wet land used for agriculture alone and that the same has to be valued as an industrial site, the claimant has succeeded. But the same shall not be enough to prove her entitlement to get enhanced compensation unless evidence is adduced showing that the market value of such property as an industrial site was more than the rate adopted by the Land Acquisition Officer. 11. In this case the claimant has not produced any document showing sale of any property in the vicinity of the land https://hcservices.ecourts.gov.in/hcservices/ under acquisition concerned in this appeal as an industrial site, so as to enable the court to adopt the same as the market value of the land under acquisition. On the other hand, the claimant has chosen to produce a certified copy of a sale deed dated 19.11.1983 wherein the claimant herself figured as the vendor in respect of a property which was a land with a building as Ex.A3. The learned Principal District Judge has rightly rejected Ex.A3 as the one not reflecting the market value of the land under acquisition as on the date of 4(1) notification. The reasons assigned by the learned Principal District Judge are quite sound. First of all, the document came into existence 13 years later. A document which came into existence in 1983 shall not reflect the market value that was prevailing in September 1970 when the notification under Section 4(1) of the Land Acquisition Act was issued. Secondly, land with a building in a residential area was the subject matter of the sale under Ex.A3. Land value and the building value have not been shown separately. Therefore, the same cannot provide any basis for assessing the market value of land under acquisition as on the date of 4(1) notification. It should also be kept in mind that the vendor under Ex.A3-sale deed was none other than the claimant. Therefore, the possibility of such a document being brought into existence with the intention of claiming more amount as compensation also cannot be ruled out. In any event, when there were a number of sales of properties in the vicinity of the land under acquisition within three years prior to the date of 4 (1) notification, a document which came into existence 13 years after the date of 4(1) notification can easily be rejected as not reflecting the correct market value of the land under acquisition as on the date of 4(1) notification. 12. When there are no sales prior to the date of 4(1) notification or subsequent to it in close proximity in time and the claimant relies on a document which came into existence long after the publication of 4(1) notification, he is bound to establish that there was no rise in the price of land after the issue of notification under section 4(1). This has been held so in Karan Singh vs. Union of India reported in 1997 (8) SCC 186. The claimant has not adduced any evidence to prove that there was no change in the land price in the area from 1970 to 1983 so that there can be a possibility to hold that Ex.A3 may form the basis for fixing the market value of the land under acquisition as on the date of 4(1) notification. The learned Principal District Judge, Pondicherry has rightly rejected Ex.A3 as a document not reflecting the market value of the land under acquisition as on the date of 4(1) notification. 13. When Ex.A3 is removed from the zone of consideration as it does not reflect the market value of the land under acquisition as on the date of 4(1) notification, there arises a vacuum in the evidence adduced on the side of the claimant regarding the market value of the land under acquisition. When such is the case, we have to see whether there is any admission on https://hcservices.ecourts.gov.in/hcservices/ the part of the appellant/Referring Officer. In this case, though the Land Acquisition Officer had collected particulars regarding 16 sales and included them in his sales statistics marked as Ex.B3, we cannot assume that the appellant/Referring Officer has admitted the genuineness of the transactions reflected in those sale deeds included in the sales statistics and the market value stated therein, excepting those sales that are relied on by the Land Acquisition Officer for fixing the market value. 14. In this case, the Land Acquisition Officer has accepted the sale particulars found in items 3 and 7 of Ex.B3- sales statistics as the market value reflecting the acquired land according to its classification into wet land or dry land. However, the Land Acquisition Officer has chosen to adopt the value of dry land reflected in item 7 of the sales statistics as the market rate uniformly applicable to all the acquired lands irrespective of their classification into wet or dry land. Thus the Land Acquisition Officer, on the conviction that the land had already been classified as industrial land and it also had the potentiality for being converted into house site, he arrived at such a conclusion that uniform rate should be applied for the entire extent of land under acquisition. Having taken sucha decision, the higher value reflected in those documents selected by him should have been adopted. This is so because it is common sense that house sites or industrial sites shall be more valuable than agricultural land classified either as wet or dry. No one would be prepared to convert an agricultural land into house sites or industrial sites, unless it would fetch a higher amount as house sites or industrial sites rather than an agricultural land. Under such circumstances, this court feels that instead of relying on item no.7 in the sales statistics, reliance should have been made in item No.3 of the sales statistics as the basis for fixing the market value of the land under acquisition. If at all the court below relied on the particulars found in sl.No.3 of the sales statistics marked as Ex.B3 as the basis for valuation on the ground that the same as reflecting the value of the wet land would amount to an admission, the court below would have been justified in doing so. On the other hand, the court below has chosen to rely on the entries found in Sl.No.15 in the sales statistics as the basis for fixing the market value of the acquired land. 15. As pointed out supra, there is no admission on the part of the appellant/Referring officer that the sale under the sale deed mentioned in item 15 of the sales statistics was a genuine one or that the amount quoted therein was the amount reflecting the correct market value of the land under acquisition. Neither the sale deed nor a certified copy of the same has been produced by the claimant. None of the parties to the said document has been examined on the side of the claimant. In this regard, the observations made by the Hon'ble Supreme Court in Uttar Pradesh State Road Transport Corporation vs. State of UP reported in 1997 (5) SCC 148 can be noticed. The Hon'ble Supreme https://hcservices.ecourts.gov.in/hcservices/ Court in the said case has observed that the non-examination of vendor or vendee to prove the market value on sale deeds shall make such sale deeds inadmissible evidence and make them unreliable. Therefore, this court comes to the conclusion that the learned Principal District Judge, Pondicherry has committed an error in relying on sl.No.15 in Ex.B3-sales statistics as the basis for fixing the market value of the land under acquisition, especially when there is no admission on the part of the appellant/ Referring officer, either by selecting the said sale as data sale reflecting the market value or otherwise. 16. Furthermore, the learned Principal District Judge committed a blender in presuming more than three fold increase in the market value over and above the rate reflected in the said entry within three months. The rate reflected in sl.No.15 of the sales statistics was Rs.961.44 per kuzhi. But the learned Principal District Judge, without any basis, whatsoever, arbitrarily fixed the market value of the land under acquisition at Rs.3,000/- per kuzhi, which is more than three times the value reflected in Sl.No.15 of the sales statistics. The award passed by the learned Principal District Judge suffers from grave error and infirmity in this regard, which shall not only justify but warrant an interference by this court in exercise of its appellate powers. 17. As