IN THE HIGH COURT OF JUDICATURE OF MADRAS DATED: 08.07.2008 CORAM: THE HONOURABLE MR. JUSTICE G.RAJASURIA A.S.No.640 of 1995 The Sub Collector Mannargudi ... Appellant / Referring Officer Vs. The Executive Officer, Arulmigu Vedaranyeswarasamy Devasthanam, Vedaranyam ... Respondent / Claimant Appeal filed u/s 54 of the Land Acquistition Act against the judgment and decree of the learned Subordinate Judge of Nagapattinam and made in LAOP No.15 of 1983 dated 14.07.1994. For appellant :: Mr.V.Ravi Special Government Pleader (AS) For respondent :: Mr.S.K.Rakhunathan JUDGMENT This appeal by the Land Acquisition Officer is focussed as against the judgment and decree dated 14.07.1994 passed by the learned Subordinate Judge of Nagapattinam in LAOP No.15 of 1983. For convenience sake, the parties are referred to here under according to their litigative status before the trial Court. 2. Heard the learned counsel appearing for the parties. 3. The nutshell of facts which are absolutely necessary and germane for the disposal of this appeal would run thus: The Government published Notification under Section 4(1) of the Land Acquisition Act on 19.09.1979 for acquiring a vast extent of land in S.Nos.170 to 187, 220 to 278 and 344 to 351 in Kodiakkarai Village, for the purpose of dedicating that area https://hcservices.ecourts.gov.in/hcservices/ towards birds sanctuary. After complying with the procedures, the Land Acquisition Officer acquired the lands concerned and assessed the compensation in a sum of of Rs.4/- per cent. Being aggrieved by such awarding of the compensation, the land owner got the matter referred to the Sub Court under Section 18 of the Land Acquisition Act. 4. During enquiry before the Sub Court, on the side of the claimant, C.Ws.1 and 2 were examined and Exs.C1 to C3 were marked. On the side of the respondent, D.Ws.1 and 2 were examined and Exs.B1 and B2 were marked. 5. Ultimately, the Sub Court enhanced the compensation from Rs.4/- per cent to Rs.8/- per cent. 6. Being aggrieved by such enhancement, the Land Acquisition Officer preferred this appeal on various grounds, the quintessence of them would run thus: The Sub Court simply enhanced the compensation without considering the fact that Ex.C.3 the sale deed emerged after Section 4(1) notification and it refers to a land of a different nature from one acquired by the Government, in addition to the fact that it is also far off from the land acquired. Accordingly, the learned Special Government Pleader prayed for setting aside the judgment and decree passed by the Sub Court. 7. The point for consideration is as to whether the Sub Court was justified in enhancing the compensation from Rs.4/- to Rs.8/- per cent and that too based on Ex.C.3 the sale deed which emerged subsequent to Section 4(1) notification published by the Government. 8. The learned Special Government Pleader (AS) submitted his argument by way of reiterating the grounds of appeal, whereas, the learned counsel for the land owner would advance his argument to the effect that there was nothing wrong in relying upon Ex.C.3 - the sale deed dated 31.10.1979 which emerged subsequent to Section 4(1) notification as in that locality no sale deeds emerged as they are emerging in other cases. 9. The whole kit and caboodle of facts and figures placed before the Sub Court would clearly indicate and highlight that the area acquired is near the sea and does not have the potentiality of becoming habitation area also. The Government intended the said area to be dedicated as a birds sanctuary. Hence, in such a case, from the available materials, the Court has to fix the compensation. Ex.C.3 dated 31.10.1978 is more than a month after the emergence of publication of Section 4(1) notification, on 19.09.1979 and it is quite obvious. https://hcservices.ecourts.gov.in/hcservices/ 10. The learned counsel for the land owner placed reliance on the decision of the Hon'ble Apex Court reported in U.J.(S.C.)1988 (2) [Chimanlal Hargovinddas vs. The Special Land Acquisition Officer, Poona and another] and developed his argument that even sale deeds which emerged after section 4(1) notification could be relied on. In this regard, he would rely upon the following excerpt. "4. The following factors must be etched on the mental screen:- (1) A reference under section 18 of the Land Acquisition Act is not an appeal against the award and the Court cannot take into account the material relied upon by the Land Acquisition Officer in his Award unless the same material is produced and proved before the Court. (2) So also the Award of the Land Acquisition Officer is not to be treated as a judgment of the trial Court open or exposed to challenge before the Court hearing the Reference. It is merely an officer made by the Land Acquisition Offices and the material utilised by him for making his valuation cannot be utilised by the Court unless produced and proved before it. It is not the function of the Court to sit in appeal against the Award, approve or disapprove its reasoning, or correct its error or affirm, modify or reverse the conclusion reached by the Land Acquisition Officer, as if it were an appellate Court. (3) The Court has to treat the reference as an original proceeding before it and determine the market value afresh on the basis of the material produced before it. (4) The claimant is in the position of a plaintiff who has to show that the price offered for his land in the award is inadequate on the basis of the materials produced in the Court. Of course the materials placed and proved by the other side can also be taken into account for this purpose. (5) The market value of land under acquisition has to be determined as on the crucial date of publication of the modification under section 4 of the Land Acquisition Act (dates of Notifications under secs. 6 and 9 are irrelevant). https://hcservices.ecourts.gov.in/hcservices/ (6) The determination has to be made standing on the date line of valuation (date of publication or notification under sec.4) as if the valuer is a hypothetical purchaser willing to purchase land from the open market and is prepared to pay a reasonable price as on that day. It has also to be assumed that the vendor is willing to sell the land at a reasonable price. (7) In doing so by the instances method, the Court has to correlate the market value reflected in the most comparable instance which provide the index of market value. (8) Only genuine instances have to be taken into account. (Some times instances are rigged up in anticipation of Acquisition of land). (9) Even post notification instances can be taken into account (1) if they are very proximate (2) genuine and (3) the acquisition itself has not motivated the purchaser to pay a higher price on account of the resultant improvement in development prospects, (10) The most comparable instances out of the genuine instances have to be identified on the following considerations:- (i) proximity from time angle. (ii) proximity from situation angle. (11) Having identified the instances which provide the index of market value the price reflected therein may be taken as the norm and the market value of the land under acquisition may be deduced by making suitable adjustments for the plus and minus factors vis-a-vis land under acquisition by placing the two in juxtaposition. (12) A balance-sheet of plus and minus factors may be drawn for this purpose and the relevant factors may be evaluated in terms of price variation as prudent purchaser would do. (13) The market value of the land under acquisition has thereafter to be deduced by loading the price reflected in the instance taken as norm for plus factors and unloading it for minus factors. (14) The exercise indicated in clauses (11) to (13) has to be undertaken in a common sense manner as a prudent man of the world of business would do. We may illustrate https://hcservices.ecourts.gov.in/hcservices/ some such illustrative (not exhaustive) factors:- Plus factors Minus factors 1. Smallness of size 1. largeness of size. 2. proximity to a road 2. situation in the interior at a distance from the road 3. frontage on a road 3. narrow strip of land with very small frontage comprised to depth 4. nearness to developed 4. lower level requiring the area depressed portion to be filled up 5. regular shape 5. remoteness from developed locality 6. level vis-a-vis land 6. some special disadvantageous acquisition factor which would deter a purchaser 7. special value for an owner of an adjoining property to whom it may have some very special advantage (15) The evaluation of these factors of course depends on the facts of each case. There cannot be any hard and fast or rigid rule. Common sense is the best and most reliable guide. For instance take the factor regarding the size. A building plot of land say 500 to 1000 sq.yds. cannot be compared with a large tract or block of land of say 10000 sq.yds. or more. Firstly while a smaller plot is within the reach of many, a large block of land will have to be developed by preparing a lay out, carving out roads, leaving open space, plotting out smaller plots, waiting for purchasers (meanwhile the invested money will be blocked up) and the hazards of an entrepreneur. The factor can be discounted by making a deduction by way of an allowance at an appropriate rate ranging approx. between 20% to 50% to account for land required to be set apart for carving out lands and plotting out small plots. The discounting will some extent also depend on whether it is a rural area or urban https://hcservices.ecourts.gov.in/hcservices/ area, whether building activity is picking up, and whether waiting period during which the capital of the entrepreneur would be locked up, will be longer or shorter and the attendants hazards. (16) Every case must be dealt with on its own fact pattern bearing in mind all these factors as a prudent purchaser of land in which position the Judge must place himself. (17) These are general guidelines to be applied with understanding informed with common sense." 11. I am of the considered opinion that the recent decision of the Hon'ble Apex Court reported in (2008)1 SCC 554 [Lucknow Development Authority vs. Krishna Gopal Lahoti and others] could be extracted here under: "16(9). It can be broadly stated that the element of speculation is reduced to a minimum if the underlying principles of fixation of market value with reference to comparable sales are made: (i) when sale is within a reasonable time of the date of notification under Section 4(1); (ii) it should be a bona fide transaction; (iii)it should be of the land acquired or of the land adjacent to the land acquired; and (iv) it should possess similar advantages." (emphasis supplied) 12. As such it is clear that the Hon'ble Apex Court's latest decision in this regard is on the line that sale deeds which emerged subsequent to Section 4(1) notification should not be relied on and even sale deeds which emerged shortly before such publication also should not be relied on. Over and above that there is one other crucial point to be noted. Ex.C.1 refers to a land in R.S.No.43, which is admittedly situated far away from the land acquired also. Hence I am of the opinion that the Sub Court was not justified in placing reliance on Ex.C.3 and in awarding higher compensation of Rs.8/- per cent. 13. Then the core question arises as to what should be the just compensation in the facts and circumstances of the case. Exs.C1 and C2 sale deeds dated 16.04.1978 and 22.04.1979 refer to Survey Numbers which are relating to habitation area. But https://hcservices.ecourts.gov.in/hcservices/ undoubtedly and indubitably, the land acquired is not an habitation area and there is no prospects of such area becoming an habitation area also and the Government correctly decided to dedicate that area as bird sanctuary. The Land Acquisition Officer, from the data collected by him relied on Ex.B.2 sale deed dated 09.03.1976 relating to S.Nos.146/9, 146/10 and 153/2 and it is evident that the value of per cent was Rs.4/-. The learned counsel for the land owner would correctly argue that even assuming that such a document has to be relied on, then it has to be seen that 3/1-2 years anterior to Section 4(1) notification such a document emerged and over the said period of 3-1/2 years, there might have been increase in valuation. 14. My mind is redolent with the one other decision of the Hon'ble Supreme Court as cited infra to the effect that for each year 10% increase could be given so as to arrive at a just compensation. (2004) 6 SCC 533 [Delhi Development Authority vs. Bali Ram Sharma and others]. An excerpt from it would run thus: "6. The lands which are the subject-matter of these appeals are acquired for the same purpose as in the aforementioned appeals, but the notification under Section 4(1) of the Act was issued on 25.2.1981 i.e. subsequent to Section 4(1) notification dated 17.11.1980. Obviously, there would be escalation of prices in regard to these lands. Hence, we think it just and appropriate to give 5% increase in the market value in respect of the lands in these appeals. In the result these appeals are also allowed and the impugned judgments are modified by reducing the amount of compensation from Rs.345 per sq yard (amounting to Rs.3,45,000 per bigha) to Rs.76,55 per bigha + 5% escalation. The respondents are entitled to statutory benefits available under the Act based on the amount of compensation as modified above. No costs. Civil Appeal No.4157 of 2003 7. The land which is the subject-matter of this appeal is acquired for the purpose as in the aforementioned appeals, but the notification under Section 4(1) of the Act was issued on 24.11.1981 i.e. subsequent to Section 4(1) notification dated 17.11.1980. Obviously, there would be escalation of price in regard to this land. Hence, we think it just and appropriate to give 10% increase in the market value in respect of the land in this appeal. In the result this appeal is allowed and the impugned judgment is modified by reducing the amount of compensation from Rs.345 per sq yard (amounting to Rs.3,45,000 per bigha) to Rs.76,550 per bigha + 10% escalation. The respondent is entitled to statutory benefits available under the Act based on the https://hcservices.ecourts.gov.in/hcservices/ amount of compensation as modified above. No costs." 15. As such, from a mere perusal of the cited excerpt it is clear that in this case four times increase at the rate of 10% could be given and it comes to Rs.5.85p per cent and taking into consideration the facts that a vast extent of land is dedicated towards birds sanctuary; readily clinching documents are not available to prove the actual market value; and the interest of the land owner being a public temple should be protected, the sum of Rs.5.85p could be rounded to Rs.6/- per cent and accordingly, the total compensation should be calculated. 16. Relating to development charges, no doubt the normal rule is 1/3rd deduction and in certain cases, it could be even 20%. But here it is a peculiar case where the entire area is dedicated as birds sanctuary. As such, the ecology has to be maintained and from that angle if viewed, I am of the considered opinion, no deduction towards development charges should be made. The following are the few decisions of the Hon'ble Apex Court: (1) AIR (2007) Supreme Court 740 [Deputy Director, Land Acquisition vs. Malla Atchinaidu] (2) (2003) 4 SCC 481 [Ravinder Narain and another vs. Union of India] (3) (2007) 9 SCC 447 [Nelson Fernandes and others vs. Special Land Acquisition Officer, South Goa and others] (4) (2008) 1 SCC 554 [Lucknow Development Authority vs. Krishna Gopal Lahoti and others] (5) (1996) 9 SCC 640 [Basavva (smt) and others vs. Special Land Acquisition Officer and others] 17. The above said judgments are relating to the lands acquired for habitation purpose, for industrial purpose, for laying roads etc. and not for any purpose as referred to in this case. As such, I am of the view that no amount need to be deducted towards development charges. Accordingly, the point is answered. 18. The learned counsel for the land owner also made an extempore submission to the effect that solatium awarded was only 15% and the interest awarded by the Sub Court also was not correct. The learned Special Government Pleader would in all fairness submit that the current rate of 30% solatium with interest would be applicable to this case. In fact, Section 4(1) notification was published on 19.09.1979 and the award was passed on 27.09.1982. The learned Special Government Pleader would clarify the legal https://hcservices.ecourts.gov.in/hcservices/ position that it is a settled proposition of law that relating such cases the benefit of the said Land Acquisition (amended) Act 68 of 1984 could be given. The five Bench decisions of the Hon'ble Apex Court reported in 1989 (2) SCC 754 [Union of India vs. Raghu bir Singh) and in 1994(5)SCC 593 [K.S.Paripoornam vs. State of Kerala] would highlight the legal position as put forth by the learned Special Government Pleader. 19. In the result, the judgment and decree of the Sub Court is modified and the enhanced compensation of Rs.8/- per cent is reduced to Rs.6/- per cent. The land owner is also entitled to all benefits as per the Land Acquisition (amended) Act 68 of 1984. 20. Accordingly, this appeal is allowed in part and the claimant is entitled to other statutory benefits as per law. No costs. Sd/- Asst. Registrar. /true copy/ Sub Asst. Registrar. To 1. The Subordinate Judge, Nagapattinam. Copy to The Section Officer VR Section, High Court, Madras. 1 cc to Mr.s.K. Rakhunathan, Advocate, sR. 35716 1 cc to Government Pleader, sR. 35706 A.S.No.640 of 1995 VSV (CO) kk 1/8 https://hcservices.ecourts.gov.in/hcservices/