1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL JURISDICTION FIRST APPEAL NO.1437 OF 1988 The State of Maharashtra (Through the Special Land Acquisition Officer, Pune) ...Appellants. v. 1 Shri Mahipatrao Malharrao Purndare Deceased Son Mr.Sunil M. Purndare 2 Shri Mohamadgani Abdulrehman Bagwan 3 Smt. Amina Kamaruddin Bagwan Since Deceased through her heirs and legal representatives 3a Mohamadgani Abdul Reheman Bagwan 3b Babasaheb Abdul Reheman Bagwan 3c Sikandar Abdul Reheman Bagwan All residing at Saswad, Tal: Purandhar, Dist. Pune. 4 Shri Babasaheb Abdulrahman Bagwan Since deceased through his legal heirs 4a Salim Babasaheb Bagwan, Son 50 yrs., 4b Rafiq Babasaheb Bagwan, Son 42 yrs., Both residing at Bagwan Ali, Post Saswad, Tal: Purandhar, Dist. Pune. 5 Sikandar Abdulrahman Bagwan 6 Sou. Chandbibi Ahmadbhai Bagwan Since deceased through her heirs 6A Mohamadgani Abdul Reheman Bagwan 6B Babasaheb Abdul Reheman Bagwan 6C Sikandar Abdul Reheman Bagwan All residing at Saswad, Tal: Purandhar, Dist. Pune. (Original Claimants) ...Respondents. 2 Ms. S.P.Manchekar, AGP for the Appellant/State. Mr.Prafulla B. Shah, adv. For the Respondent Nos.1 to 6. WITH FIRST APPEAL NO.225 OF 1989 1 Shri Mahipatrao Malharrao Purndare Deceased Son Mr.Sunil M. Purndare 2 Shri Mohamadgani Abdulrehman Bagwan 3 Smt. Amina Kamaruddin Bagwan Since Deceased through her heirs and legal representatives 3a Mohamadgani Abdul Reheman Bagwan 3b Babasaheb Abdul Reheman Bagwan 3c Sikandar Abdul Reheman Bagwan All residing at Saswad, Tal: Purandhar, Dist. Pune. 4 Shri Babasaheb Abdulrahman Bagwan Since deceased through his legal heirs 4a Salim Babasaheb Bagwan, Son 50 yrs., 4b Rafiq Babasaheb Bagwan, Son 42 yrs., Both residing at Bagwan Ali, Post Saswad, Tal: Purandhar, Dist. Pune. 5 Sikandar Abdulrahman Bagwan 6 Sou. Chandbibi Ahmadbhai Bagwan Since deceased through her heirs 6A Mohamadgani Abdul Reheman Bagwan 6B Babasaheb Abdul Reheman Bagwan 6C Sikandar Abdul Reheman Bagwan All residing at Saswad, Tal: Purandhar, Dist. Pune. (Original Claimants) ....Appellants. v 3 The State of Maharashtra through The Special Land Acquisition Officer No.XIV, Pune ...Respondents. Mr.Prafulla B. Shah, adv. For the Appellant Nos.1 to 6. Ms. S.P.Manchekar, AGP for the State. CORAM : J.H. BHATIA, J. DATED : 29th July , 2009 Oral Judgment: 1 These two cross appeals are filed by the State and the Claimants challenging the judgment and the award passed by the Reference Court, i.e., Extra Joint District Judge, Pune. 2 To state in brief, under Section 126 of the Maharashtra Regional Town Planning Act, Notification dated 27.8.1981 was issued whereby the lands bearing City Survey Nos.2117 and 2118 situated at Saswad were proposed to be acquired for the purpose of primary school and play ground. These lands were reserved in the sanctioned Development Plan of Saswad Town. Area of City Survey No.2117 was 908.62 sq.mtrs. and that of City Survey No.2118 was 3570 sq.mtrs. Award was passed on 10.8.1983 and the possession of the lands was taken on 30.8.1983. As per the panchanama, 533 trees of different varieties including fruit trees were standing on the land. There was old 4 wall in City Survey No.2118. There were also a structure and a well in City Survey No.2117. Land Acquisition Officer held that value of the land bearing City Survey No.2117 was Rs.7/- per sq.mtr. while that of City Survey No.2118 was Rs.5/- per sq.mtr. Structure in the City Survey No.2117 was valued at Rs.200/- and the wall was valued at Rs.26,253/-. As per the report of the Horticulture Department, trees were valued at Rs.85,701/-. Accordingly, total compensation was fixed at Rs.1,26,832/-. Solatium @ 30% and the additional component @ 12% were also granted. The claimant no.1 Mahipatrao was the landlord while the others were tenants. There is no dispute about their shares. Claimants, being not satisfied with the compensation awarded by the Land Acquisition Officer, made a claim before the Collector for being referred under Section 18 of the Land Acquisition Act. According to them, the value of the land would be Rs.1 lakh per acre and it had potentiality of development because it was situated within the town and the land was already reserved for development. According to them, value of the property should have been Rs.24,87,010/- . However, they restricted their claim to Rs.7,45,857/-only. It included value of the land, value of the wall, structure , well, fruit trees, etc. Accordingly, Reference was made to the District Court, Pune. 5 3 The claim was contested on behalf of the State contending that the urban potentiality could not be taken into consideration and the Land Acquisition Officer was right in treating the land as agricultural land and rate was properly fixed. 4 After hearing the parties, the Reference Court held that the land had potentiality of development because on the other lands around this land, already developments had taken place and buildings were standing. Taking into consideration, sale transactions, which had taken place shortly before the date of Notification, Reference Court held that the average price would come to Rs.65/- per square meter. but as this land was not declared to be non-agricultural , he fixed the price at Rs. 52/- per sq. mtr. Method adopted by the Land Acquisition Officer granting compensation for the trees, well, etc. was not approved by the Reference Court. It was found that @ Rs.52/- per sq.mtr., value of the land would be Rs.2,32,888/-, value of the structure, gate, etc. was taken at Rs.26,503/- and the Reference Court fixed the amount of compensation at Rs.2,59,391/-. Reference Court directed that excluding the amount, which was already paid, balance amount of Rs.1,32,559/- with solatium @ 30% and Additional Component @ 12% be paid to the claimants within a period of three months failing which the amount 6 would carry interest @ 6% p.a. 5 State has preferred the First Appeal No.1437 of 1988 challenging the compensation awarded by the Reference Court. In the First Appeal No.225 of 1989 claimants contended that compensation awarded was not sufficient and that Reference Court had committed error in fixing rate of interest also. 6 Heard the learned counsel for the Parties. Perused the impugned judgment and the material, which was placed before the Reference Court. 7 Reference Court relied upon Collector of Thane v. Chaturabhuj A.I.R. 1926, Bombay 365 and State v. Alameluthuyammal A.I.R. 1970 Madras, 184, wherein it was held that when any property on account of its potentiality for building purpose is valued then it is inclusive of all its value and nothing can be allowed further for the trees standing on it. In the present case, claimants consistently claimed that this property was surrounded by the other lands on which some development had already taken place and the the residential structures were standing on them. Material was placed to show that plots near this particular land were sold for the purpose of construction of house. This particular land was reserved for development 7 under the sanctioned Development Plan of the town and as per the Notification under Section 126, this land was acquired for the purpose of primary school and play ground. Taking into consideration all these facts and circumstances, it would be futile to hold that the value of the land should be assessed as agricultural land and , therefore, urban potentialities of land could not be denied. Therefore, Reference Court embarked upon finding the market value treating this property as the property having non agricultural and particularly, urban potentiality. The Reference Court referred to certain transactions indicating that certain properties were sold at the rate of Rs.44/- p.s.m and the maximum price availed by the certain properties in town was Rs.403/- p.s.m. Those were very small plots and not close to the property. Reference Court took note of two sale deeds, Exhibit 39 and 40. Both these sale deeds were executed in April, 1980, i.e., one year prior to Notification in this case. Sale deed Exhibit 39 revealed that plot of 99.5 sq.mtrs. was sold for Rs. 5,000/-. It means the rate was around Rs.50/- p.s.m. As per the sale deed Exhibit 40, plot of 116.2 sq.mtrs. was sold for Rs.9,000/-. This price under this sale deed was around Rs.75/- psm. The learned Judge of the Reference Court held that average rate of these two transactions was about Rs.65/- psm. Both the plots were within the municipal limits and 8 were already developed property. The property under acquisition was still recorded as agriculture land and it was yet to be converted into Non Agriculture purpose. Taking into consideration this aspect but the possibility of its being converted to Non Agriculture use, he reduced the average rate by about 20% and brought it down to Rs.52/- psm. The learned Judge, relied upon Nowroji v. Government of Bombay AIR 1925 P.C.211 wherein it was observed that compensation can not be fixed by abstract formula of mathematics and some guess work has to be done. As per that rate, land was valued at Rs.2,32,888/- Even though there were 533 trees including fruit trees and there was also a well situated on the land, Reference Court refused to grant any separate compensation for the same on the ground that when the land was being valued as non agriculture for building purposes, separate value could not be given for trees and even the well. He accepted the valuation made by the expert in respect of wall, gate and the structure. Structure was small and wall was very old and it was difficult to assess exact value of the same. Taking into consideration all the circumstances, it is difficult to find any fault with the compensation fixed by the Reference Court. 8 In view of the above observations, appeal filed by the State is liable to be dismissed. The appeal of the claimants is two fold. One is 9 about the compensation amount and another is about the interest. As far as compensation amount is concerned, there is no merit in the appeal. However, Section 28 of the Land Acquisition Act provides that if the compensation awarded by the Court is in excess of the sum awarded by the Collector, Court may direct that the Collector shall pay interest on such excess amount @ 9% p.a. from the date on which he took possession of the land till the date of payment on such excess amount. However, proviso to Section 28 further provides that if such excess amount is not paid within one year, rate of interest shall be 15% p.a. This provision was made on 24.9.1984 by amending Section 28 as per the Amendment Act of 1984. Before that rate of interest was 6%. It appears that Reference Court awarded interest @ 6% p.a. as per the unamended provisions of Section 28. Possibly amended provision was not brought to his notice when the judgment was passed in 1987. Therefore, to the extent of interest, order passed by the Reference Court needs to be modified. 9 For the aforesaid reasons, First Appeal No.1437/88 stands dismissed. First Appeal No.225/89 is partly allowed and the order passed by the Reference Court stands modified in respect of interest as follows: 1 The Collector shall pay on the excess amount of 10 compensation being Rs.1,32,559+ 30% solatium and 12 % additional component interest @ 9% p.a. from the date of taking possession, i.e., 30.8.1983 and if full compensation is not paid within one year from the date of possession, said amount shall carry interest @ 15% p.a. beyond the period of one year till the date of payment. 2 No order as to costs. (J.H.Bhatia, J.)