1 246 fa 320.92 .doc K IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION FIRST APPEAL NO.320 OF 1992 The State of Maharashtra & Anr. ..Appellants. Vs. Dodappa Khachappa Kamble & Anr. ..Respondents. Ms. V.S.Mhaispurkar, AGP for appellants. CORAM : K.K.TATED, J. DATED : 13/01/2011. PC: 1 Heard the learned AGP for the appellants/State of Maharashtra. 2 None for respondents. 3 The present appeal is preferred by original opponents/State of Maharashtra against the judgment and award dated 26th April, 1991 passed by the IInd Additional District Judge, Kolhapur in Land Acquisition Reference No.73 of 1984. 2 246 fa 320.92 .doc 4 A few facts of the matter are as under: The Special Land Acquisition Officer issued notification under section 4 of the Land Acquisition Act, dated 13th July, 1978 for acquiring respondents/claimants land from Tudiye, District Kolhapur as a submerged area of Tilari Hydro Electric Project. After following due process of law, the Special Land Acquisition Officer passed award dated 19th December, 1983 and awarded sum of Rs.38,577.85 ps. towards the land, Rs.6,004.35 ps. towards the house and other immovable things, Rs.6,687.40 ps. under section 23 (2) of the Land Acquisition Act i.e. 30% solatium. In this way the Special Land Acquisition Officer awarded total compensation of Rs.51,269.80 ps. to the respondents/claimants. 5 Being aggrieved by the award passed by the Special Land Acquisition Officer, the respondents/claimants preferred reference under section 18 of the Land Acquisition Act, dated 25th April, 1986 claiming compensation in respect of sugar- growing land at the rate of Rs.50,000/- per acre, paddy land at the rate of Rs.35,000/- per acre and nachni land at the rate of Rs.20,000/- per hectare. But the claimants restricted their total claim to Rs.1,05,000/-. 3 246 fa 320.92 .doc 6 In the said reference the appellants/State of Maharashtra filed their written statement dated 11th August, 1986 opposing the respondents’ reference under section 18 of the Land Acquisition Act for enhancement of compensation. 7 The reference court considered the sale instances produced by respondents/claimants and held that claimants are entitled to enhanced compensation in respect of the acquired land at the rate of Rs.16,000/- per acre. 8 The learned AGP appearing on behalf of appellants/State submits that the reference court erred in coming to the conclusion that respondents/claimants are entitled enhanced compensation in respect of acquired land at the rate of Rs.16,000/- per acre. She submits that the respondents/ claimants failed to produce any cogent evidence on record to show that they are entitled to enhanced compensation. She further submits that the reference court erred on relying on the sale deed at Exhibit-18 for coming to the conclusion that respondents/claimants are entitled to enhanced compensation in respect of acquired land at the rate of Rs.16,000/- per acre. 4 246 fa 320.92 .doc 9 I have gone through the record and proceedings. The respondents/claimants examined five witnesses to prove the market value of the acquired land. They relied on sale instances at Exhibits-18, 20, 33, 34. The reference court discarded all the sale instances except sale instance at Exhibit 18. Sale instance Exhibit-18 is dated 31st December, 1979. The claimants examined PW2 Kallappa to prove the sale instance. According to Kallappa, one Narayan Ramu Thanaba purchased 26.3 Ars of land out of survey no.440/2 of village Tudiye for Rs.10,000/-. In the present case, the Special Land Acquisition Officer issued notification under section 4 of the Land Acquisition Act dated 13th July, 1978. In my view, the reference court relied on sale deed Exhibit-18 because sale deed at Exhibit-18 is from the same village from which the land was acquired by the appellants. 10 The question of fixation of market value is a paradox which lies at the heart of the law of compulsory purchase of land. The Apex Court in the matter of Land Acquisition Officer Elur and others vs. Jasti Rohini (Smt) and another reported in (1995) 1 SCC 717 held that market value of the acquired land is to be determined with reference to the price which the land if sold in the open market by a willing seller might reasonably be 5 246 fa 320.92 .doc expected from the willing purchaser. It is further held by the Apex Court that the question of fixation of market value of the acquired land is to be determined on the evidence on record. Paragraph 6 of the judgment reads thus: “6. The admissibility and evidentiary value of the entries in the basic value register was considered by this Court in Jawajee Nagnatham vs. Revenue Divisional Officer. After an elaborate consideration this Court held that the basic value register is maintained only for fiscal purpose of collecting stamp duty and registration charges. The market value mentioned therein cannot form a foundation to determine the compensation under Section 23(1) of the Act. It is settled law that the market value should be determined on the hypothesis of the price fetched in the bona fide sale by a willing vendor who would agree to sell the lands to a willing vendee of the acquired land or the land in the neighbourhood possessed of similar features. The notification under Section 47-A which is meant to be a guide for collection of revenue cannot form the basis for determination of market value of the land under Section 23(1) of the Act. The question of 6 246 fa 320.92 .doc fixation of market value is a paradox which lies at the heart of the law of compulsory purchase of land. The paradox lies in the facts that the market value concept is purely a phenomenon evolved by the courts to fix the price of land arrived between the hypothetical willing buyer and willing seller bargaining as prudent persons without a medium (sic modicum) of constraints or without any extraordinary circumstances. But the condition of free market is the very opposite of the condition of the compulsory purchase which is ex hypothesi, a situation of constraints. Therefore, to say, that for compulsory purchase, compensation is to be assessed and market value is to be determined in that state of affairs has to be visualised in terms by its direct opposite. To solve the riddle, courts have consistently evolved the principle that the present value as on the date of the compulsory acquisition comprised of all utility reached in a competitive field as on the date of the notification and the price on which a prudent and willing vendor and a similar purchaser would agree. The value of the land shall be taken to be the amount that the land if sold in 7 246 fa 320.92 .doc the open market by a willing seller might be expected to realise from a willing purchaser. A willing seller is a person who is a free agent to offer his land for sale with all its existing advantages and potentialities as on the date of the sale and willing purchaser taking all factors into consideration would offer to purchase the land as on the date of the sale. Future suitability or adaptability of the land for any purpose shall not be taken into account. The compensation must, therefore, be determined by reference to the price which a willing vendor might reasonably expect to obtain from a willing purchaser as on the date of the notification published under Section 4(1). The disinclination of the seller to part with his land and the urgent necessity of the vendee to purchase the land must, alike, be disregarded and neither of them must be considered as acting under compulsion.” 11 Determination of compensation for compulsory acquisition involves consideration of the price which a hypothetical willing purchaser can be expected to pay for the lands in the existing 8 246 fa 320.92 .doc use as well as relatable potentialities. The acid test is what willing vendor would offer and a prudent willing buyer, taking all relevant prevailing conditions of the normal market, fertility of the land, location, suitability for the purpose, for which it is purchased, the nature of the land, the crops raised and the nature of the income likely to be derived from the lands, the expenditure to be incurred for raising the crops and the net profits etc. would be the relevant factors in arriving at the net market value and if evidence is adduced in that behalf, the market value need to be determined taking into consideration all those facts. 12 Considering the above mentioned facts and circumstances and the sale deed at Exhibit-18, I am of the opinion that the reference court rightly awarded compensation in respect of acquired land at the rate of Rs.16,000/- per acre. 13 First appeal is dismissed. 14 Considering the facts and circumstances of the present case, no order as to costs. (K.K.Tated, J.)