1 mp t IN THE HIGH COURT OF JUDICATURE OF BOMBAY CIVIL APPELLATE JURISDICTION FIRST APPEAL NO. 298 of 1990 Shantinath Mallappa Sonaj & Ors. .. Appellants versus Special Land Acquisition Officer and Anr. .. Respondents ... Mr.Umesh Mankapure for the appellant Mr.A.R. Patil, AGP for the respondent. CORAM CORAM CORAM : B.H.MARLAPALLE AND : B.H.MARLAPALLE AND : B.H.MARLAPALLE AND D.G. D.G. D.G. KARNIK, JJ KARNIK, JJ KARNIK, JJ JUDGEMENT JUDGEMENT JUDGEMENT RESERVED ON: 19th January 2009 RESERVED ON: 19th January 2009 RESERVED ON: 19th January 2009 JUDGEMENT JUDGEMENT JUDGEMENT PRONOUNCED : 25th February 2009 PRONOUNCED : 25th February 2009 PRONOUNCED : 25th February 2009 JUDGEMENT: JUDGEMENT: JUDGEMENT: (Per D.G. Karnik, J) (Per D.G. Karnik, J) (Per D.G. Karnik, J) 1. This appeal is directed against the judgement and order dated 10th August 1987 passed by the learned Extra Joint District Judge, Pune dismissing the claim for enhancement made by the appellants by land reference no.104 of 1977 under section 18 of the Land Acquisition Act 1894. 2 2. Government of Maharashtra acquired very many lands for construction of Ujjani Dam. A notification under section 4 of the Land Acquisition Act was issued on 25th October 1971 proposing acquisition of 34 Ares of Land of the appellant out of Gat No. 3/10 at Village Bhigwan. After making usual enquiry, the Land Acquisition Officer by his award dated 26th March 1976 held that the market value of the land at Gat No.3/10 was Rs.5,000/- per hectare. Accordingly, the Land Acquisition Officer awarded compensation of Rs.1,700/- to the appellants for the land acquired. As the appellants were running the petrol pump in the acquired land and had built some structures for the said petrol pump, the Land Acquisition Officer awarded compensation of Rs.14,689/- towards the cost of the structures. The Land Acquisition Officer also awarded 15% solatium on the aforesaid amount. Being aggrieved by the amount of compensation, the appellants moved an application to the Collector for making reference u/s.18 of the Land Acquisition Act. Accordingly, reference was made to the District Court Pune by the Collector vide his order dated 10th August 1987. The learned Extra Joint District Judge to whom the reference was transferred, after hearing the parties held that the compensation awarded was 3 adequate and proper and consequently dismissed the reference. Aggrieved appellants are in appeal. 3. In the reference u/s.18, enhancement compensation was claimed principally under the four counts viz. i) market value of the land was more than Rs.5,000/- per hectare ii) the structures erected by the appellant were not properly valued and they ought to have been valued much higher iii) the appellants were required to shift the petrol pump from the acquired land to another site resulting into a business loss. The appellants were therefore entitled to the compensation for the loss of business. iv) the reference court ought to have been awarded solatium at 30% p.a. instead of 15% awarded by the Land Acquisition Officer. 4. At the hearing of the appeal, learned counsel for the appellant did not seriously dispute the valuation of the land made by the Land 4 Acquisition Officer and confirmed by the reference court. Mr.Shah, an Architect was examined as Exhibit-24 by the claimant to prove that the value of the land was higher than Rs.5,000/- per hectare. In the examination in chief, he stated that the market value of the acquired land was Rs.5/- per sq.m. and therefore compensation at Rs.5/- per sq.m should have been awarded for the acquired land. In the cross examination Mr.Shah admitted that he had not passed any examination regarding the valuation of lands. In Land Reference No.196 of 1977, the Reference Court had fixed the market value lands at Bhigwan at Rs.2,500/- per acre in the year 1973-74 which was equivalent to Rs.6,250/- per hectare. That judgement has become final. Thus in the year 1971, when the notification u/s.4 for acquisition of the suit land was issued, the market value of the lands at Bhigwan would be in the vicinity of Rs.5,000/- per hectare. That was the rate fixed of the Special Land Acquisition Officer. No sale instances were cited by the appellant to show that the rate of the lands in the vicinity of the acquired land was more than Rs.5,000/- per hectare as on 25th October 1971. We therefore see no reason to revise the rate fixed by the Land Acquisition Officer and confirmed by the Reference Court at Rs.5,000/- per hectare. 5 5. As regards the loss of business claimed by the appellant no reliable evidence was adduced by them to show that they suffered any loss of business on account of the acquisition. The appellants were running a petrol pump in partnership in the acquired land. On acquisition, the business was not closed but was shifted to another place nearby. The date of closure of the business at the acquired land and date of the opening of the business at the new place is not on record. There is no material on record that the business remained closed for any period much less any specific period has been mentioned by the appellant no.3 who examined himself on behalf of the appellants. The appellants however have produced on record the Income tax assessment orders for the Assessment Year 1975-76 to 1978-79. In the Assessment Year 1975-76 (Accounting Year 1974-75) the profit was Rs.2,79,624/-. In the Assessment Year 1976-77, profit was Rs.1,66,268/- and in the Assessment Year 1977-78, profit was Rs.1,26,932/- as per the assessment orders. However for the next Assessment year i.e. 1978-89 there was a loss of Rs.46,000/-. We fail to see how these assessment orders are relevant for the purpose of assessing the alleged loss of business. Firstly, notification for acquisition was issued on 25th October 1971 and therefore, the income for the year 1971 or prior 6 thereto was relevant for the purpose of estimating the loss of business, if at all there be any. Neither the assessment orders nor the books of accounts nor any other evidence was adduced to show what was the income earned per year by the appellants out of the business of petrol pump at or prior to 25th October 1971. The earliest period for which Income tax assessment order was produced was for accounting year 1974-75 which is three years later than the relevant date. Secondly, the appellant no.3 in his deposition has admitted that appellants were running several businesses and petrol pump was only one of such businesses. Consolidated accounts were maintained in respect of all the businesses and separate accounts were not maintained in respect of the business of the petrol pump. Thus, there was no material on record to show what was the income earned by the appellants from the business of petrol pump carried on the acquired land and what was the loss of income suffered by the appellants on account of the closure/shifting of the petrol pump from the acquired land to other land. The Reference Court has therefore rightly rejected the claim of the appellants for the loss of business. 6. As regards the valuation of structures, there is no dispute between the parties that the 7 appellants were running a petrol pump in the acquired land and had erected thereon structures necessary for carrying out the business. Mr.Shah, Architect visited the site while the structures were still in existence. According to him, the net value of the structures was Rs.55,733.05. He filed the detailed report of valuation of the structure at Exhibit-25. He proved the report in his examination in chief. In paragraph no.6 of the deposition, he stated that as per the PWD rates the estimated cost of construction of structures was Rs.69,666.33 and after allowing depreciation on the date of valuation, they were valued by him at Rs.55,733.05. In his deposition, he stated that he had taken the measurements of the structures and also stated the method of calculations adopted for the purpose of valuation. We withstood to the cross examination and nothing was brought on record to impeach the valuation of the structures made by Mr.Shah. The learned reference court however rejected the evidence of valuation of the structures adduced by Mr.Shah on the ground that the appellants had not produced on record the evidence regarding the cost incurred by them for erecting the structures and as the best evidence was withheld he did not accept the valuation made by Mr.Shah. No questions were put to the appellant no.3 in his cross examination that the appellants possessed the vouchers regarding the 8 expenditure made for erection of the structures. In fact, there was no evidence on record that appellants were in possession of any documentary evidence regarding the cost of construction incurred for erecting the structures. In the absence of any such evidence and in the absence of even a suggestion to the appellants that they were in possession of the vouchers, accounts or any other documentary evidence regarding the cost of erection of the structures, the reference court erred in drawing an adverse inference against the appellants. In any event, as stated earlier, the evidence of Mr.Shah, Architect who had valued the structures is cogent and there was no reason to disbelieve his evidence. In the circumstances, we are of the view that the structures ought to have been valued at Rs.55,733.05 (rounded off at Rs.55,700/-) and compensation ought to have been awarded to the appellants in that amount for the structures. 7. As regards the amount of solatium, the original award was passed by the Land Acquisition Officer in the year 1977. An application was made by the appellant to the Collector for reference u/s.18 of the Land Acquisition Act and the matter was referred to the Court. The Court received reference of the Collector on 23rd September 1977 and decided 9 the same on 10th August 1987. The award pased by the reference court was thus passed after the amendment of section 23 (2) of the Land Acquisition Act which provides for compensation at 30% instead of 15%. In view of the decision of the Constitution Bench of the Supreme Court in Union of India Vs. Raghuveer Singh, AIR 1989 SC 1933 and a bench of two Judges of the Supreme Court in Koyappathodi Vs. State of Kerala AIR 1991 SC 2027, the award by the reference court having been passed after the amendment of section 23 of the Land Acquisition Act, the appellant was entitled to the solatium at 30% p.a. 8. For these reasons, the appeal is partly allowed. The award passed by the Land Acquisition Officer and confirmed by the Reference Court in so far as it relates to the compensation for the value of the land and claim made for loss of business is confirmed. The award however is modified to the extent that the amount of compensation for the structures is enhanced from Rs.15,531.25 to Rs.55,700/-. The appellants shall also be entitled to solatium at 30% p.a. instead of 15% on the entire amount of the compensation. . Costs in cause. 10 (D.G. KARNIK, J) (B.H. MARLAPALLE, J)