1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION FIRST APPEAL NOS. 1339 TO 1359 OF 2006 WITH CROSS OBJECTION (ST.) NOS. 19523, 6830,18572, 7558, 6831, 7560,7561, 6832, 10486, 10522, 25456, 6833, 25457,6834, 25458, 7562, 7563, 18575, 6835, AND 19527 OF 2007 WITH CIVIL APPLICATION NOS. 2678,2680 to 2699 of 2006, 1. The State of Maharashtra, ) (Notice to be served on the Collector, ) Nashik. ) 2. The Special Land Acquisition Officer, ) Scarcity No.1, Nashik. ) 3. The Executive Engineer, ) Kadawa Project Division, Sinnar. )..Appellants Versus 1. Punja Trambak Lahamage ) (since deceased through his legal heirs) ) (a) Dinkar Punjaji Lahamge ) (b) Yashwant Punjaji Lahamge ) (c) Mandabai Kamlakar Elmane ) (d) Gangabai Punjaji Lahamge ) All r/o at Post Sanjegaon, Tal. Igatpuri, ) Dist. Nashik. )..Respondents Mr. K.K. Tated, Assistant Government Pleader, for the State. Mr. P.N. Joshi for the claimants. Mr. K.B. Sonwalkar for the added respondents (acquiring authority) CORAM: SWATANTER KUMAR, C.J. & 2 J.P. DEVADHAR , J. Judgment reserved on : March 12, 2008 Judgment delivered on: March 27, 2008 JUDGMENT (Per Swatanter Kumar, C.J.): By a common judgment and award dated 23rd December, 2005, the learned 2nd Ad-hoc Additional District Judge, Nashik, disposed of 21 land references made under Section 18 of the Land Acquisition Act, 1894, hereinafter referred to as “the Act” by the Special Land Acquisition Officer (S.L.A.O.). Aggrieved from the enhancement granted by the Court, the State Government has filed the above 21 Appeals. The claimants, upon service, filed 20 cross-objections in those appeals. As all these appeals and cross objections are directed against the same judgment, it would be appropriate to dispose of all these matters by a common judgment. 2. We may notice necessary facts at the very outset. The SLAO issued a notification under Section 4 of the Act on 17th February, 1994 intending to acquire lands from the revenue estate of village Sanjegaon, Tal. Igatpuri, District Nashik, for a public purpose viz. Mukane Dam Project. In furtherance to the above notification, a declaration under Section 6 of the Act was issued on 16th June, 1994, acquiring nearly 265 3 hectares and 54 ares of land from this revenue estate. The SLAO, after following the prescribed procedure, made and published the Award dated 14th December, 1995 vide which he segregated the land into different categories and depending upon the location and nature of the land awarded compensation at varying rates from a minimum being Rs. 40,000/- per hectare to Rs. 1,10,000/- per hectare. 3. The claimants being dissatisfied from the compensation awarded to them by the Collector filed applications for enhancement of the compensation. These references filed under Section 18 of the Act on 22nd April, 1996 were forwarded to the Court of competent jurisdiction for determination of compensation payable to the claimants in terms of Section 23 of the Act. Parties led evidence, documentary and oral. After taking into consideration the evidence led by the parties, as already noticed, vide award-cum-judgment dated 23rd December, 2005, the Reference Court enhanced the compensation payable to the claimants to Rs. 2,16,924/- per hectare for bagayat, Rs. 1,73,539/- per hectare for jirayat and Rs. 86,770/- per hectare for pot kharaba lands. This compensation was determined by the learned Reference Court with reference to Exhibits-29, 33 and 42, crop statements used for proving that the land was bagayat land, Exhibits-74, 76 and 84, sale instances 4 or agreement to sell of the lands from the revenue estate of village Sanjegaon. Before the Reference Court, the State primarily relied upon Exhibits-48 and 49 which were the judgments of the Court in different Land References including LR No. 588/97 wherein the Court had granted compensation at the rate of Rs. 40,000/- per hectare in the same village. Possession of the land was taken on 1st July, 1994 vide Exhibit-66. It is apparent and not in dispute before us that urgency clause was not invoked by the competent authority in relation to taking over of possession. 4. According to the claimants, with reference to the sale instances proved by them on record, they were entitled to compensation at the rate of Rs. 4,00,000/- per hectare and thus they filed the cross- objections for further enhancement of the compensation granted by the Reference Court in the present appeals. According to the learned counsel appearing for the State, the compensation awarded to the claimants is excessive, unreasonable and the award of the SLAO is liable to be restored. 5. At the very outset, the learned counsel appearing for the parties commonly stated that all the evidence led in the present case was also led by the parties before the learned Reference Court in Land Reference No. 191/99. Against that judgment, an appeal was filed by 5 the State being First Appeal No.1171 of 2007 (State of Maharashtra vs. Smt. Fulyabai Kisan Govardhane and others). In that case also, the lands were acquired from the revenue estate of village Sanjegaon and for the same purpose viz. Mukane Dam. The issues were practically covered by that judgment and there the Court had partly allowed the State Appeals. It will be useful to reproduce the reliefs granted in those appeals by this Court to the parties. Jirayat land: Compensation payable in terms of Exhibit 42 Rs. 1,15,385/- per hectare plus Rs. 53,846/- ( 10 per cent annual increase on this value for the intervening period 4-7-1989 to 2-2-1994) = Rs. 1,69,231/- minus Rs. 42,307/- (25 per cent aggregate deduction for small piece of land). Thus the total comes to Rs. 1,26,924/- per hectare for Jirayat land. Bagayat land: Rs. 1,26,924/- (market value of jirayat land) plus Rs. 31,731/- (25 per cent of market value of jirayat land) = Rs. 1,58,655/-. Thus the total market value for bagayat land comes to Rs. 1,58,655/- per hectare. Pot Kharab land: Rs. 1,26,924/- (market value of jirayat land) minus Rs. 19,038/- (15% market value of jirayat land) = Rs. 1,07,886/-. Thus, market value of pot kharab land is Rs. 1,07,886/- per hectare. It is to be noticed that according to the learned counsel appearing for the claimants, though the judgment of this Court in the case of State vs. Smt. Fulyabai (supra) is fully applicable to the present case, still the claimants would be entitled to difference and higher compensation than the one awarded under that judgment for the following reasons. 6 5.1. The notification under Section 4 of the Act was lastly advertised in the paper on 15th April, 1994, though dated 2nd February, 1994. That being the last date of publication of notification in terms of the provisions of the Act should be treated as the relevant date for determination and payment of compensation to the claimants. 5.2 Despite the fact that there may be practically little evidence led both in these cases, still Exhibit-74, sale deed dated 4th July, 1989 should be treated as the value of the land indicated as on 31st January, 1989, the date on which the parties had agreed to sell the land for given consideration and had paid the earnest money. Registration of the sale deed and completion of the transaction in July, 1989 was a consequence of the agreement between the parties, and thus they would be entitled to increase in compensation for the intervening six months period from January to July, 1989. 5.3 In terms of Section 34 of the Act, the claimants would be entitled to receive statutory rate of interest at the rate of 15 per cent after the lapse of first year from the date of notification till the date of possession i.e. 1st July, 1994. The learned Reference Court has erred in granting claimants only 9 per cent interest for the entire period. 7 5.4 The lands where the claimants were taking two crops ought to have been treated as bagayat land and consequential deduction, because the lands were treated as jirayat lands by the Reference court, should be reversed and the entire bagayat and jirayat lands should be given common compensation. 5.5 And lastly, the claimants would be entitled to the benefit of Section 23-1A of the Act for the period commencing from the date of notification till the date of the Award and not till the date of possession i.e. 1st July, 1994. 6. In response to these contentions, the learned Assistant Government Pleader appearing for the State fairly stated that the claimants would be entitled to the benefit claimed by them in terms of Section 34 of the Act at the increased rate (15 per cent per annum) after lapse of first year from the date of notification. Resultantly, there is no need for us to discuss this controversy any further and cross objections filed by the claimants would be liable to succeed to this extent in any case. 7. Coming to the other aspect, the claim raised on behalf of the 8 respondents in the State appeals is that they would be entitled to enhanced compensation because of the intervening period between 31st January, 1989 and 4th July, 1989 i.e. the date of the agreement to sell and the date of registration of the sale deed. This argument is based on the premise that the parties had agreed to sell the land admeasuring 13 ares for Rs. 15,000/- as on the date of agreement to sell i.e. 31st January, 1989 and the sale deed was registered on 4th July, 1989, being Exhibit-74. Computed on the basis that the market value of the land as on January, 1989 is Rs. 1,15,385/- per hectare and the increasing trend in the price of the land as has been shown by the claimants, the value of Rs. 1,15,385/- should be increased to determine the market value of the property as on 4-7-1989. This argument on behalf of the claimants proceeds on a fallacy of fact and law both. It is a settled rule of law that agreement to sell does not pass any title in the property. Agreement to sell is an agreement between the parties which would culminate into a registered sale deed only after the obligations of each of the parties to the agreement is fulfilled by them. Mere fact that under the agreement to sell, a time is given for payment of sale consideration by itself is no evidence on the fact that the value of the property will increase in the meanwhile. It is not even necessary that every agreement to sell results in execution of a registered sale deed. In simple words, the 9 agreement to sell neither creates any title in the property nor is a document by which transfer of the property takes place between a willing seller and a willing buyer. 8. Thus, it is not possible for the Court to accept the contention of the claimants that they are entitled to increase in determination of the fair market value of the land in question for a period of six months, the time gap between the agreement to sell and execution of sale deed. Therefore, we reject this claim. 9. The learned counsel appearing for the claimants relied upon the judgment of the Supreme Court in the case of State of Haryana vs. Ram Sangh, AIR 2001 SC 2532, to contend that the agreement to sell could form the basis for determination of fair market value of the land and payment of amount on account of potential value over and above the market value of the land could be computed in that manner. This judgment is primarily for the proposition that registered agreement to sell is inadmissible unless parties are examined, keeping in view the provisions of Sections 74, 76 and 77 of the Indian Evidence Act. The documents are admissible without examination of the parties but still the transactions could be rejected by the Court being sham or mala fide. 10 This is not the question with which are are concerned in the present case and reliance on this judgment is entirely misplaced. Therefore, we reject this claim. 10. Before we proceed to discuss the merits or otherwise of the claim, we may refer to a recent Division Bench judgment of this Court in the case of The State of Maharashtra and another vs. Valu Yesu Suryavanshi and others (First Appeal No. 2222 of 2007) where the Court dealt with the question at some length by referring to various judgments of the Courts and came to the following conclusions: 9. Coming to the third argument raised on behalf of the State in regard to grant of benefit to the claimants under Section 23 (1A) of the Act, at the very outset we may notice the findings recorded by the Reference Court while granting relief to the claimants. “17. In the case of Gulabrao vs. State of Maharashtra [ 2003 (3) Mh. L.J. 997) Hon'ble Bombay High Court held that a claimant is entitled for 30% solatium on the amount of compensation. In view of these observations, the claimants in these cases will get 30% solatium. The claimants requested for providing additional compensation in terms of component on the Value of the Property from the date of taking possession. The evidence of PW-1 Deoram reveal that the possession of the lands from the claimants was taken on 1/7/1994. The claimants filed possession receipt Exh. 84 to show that the possession of their fields was taken on 1/7/1994. The Government is not coming with any evidence as to when the possession of the property was taken. So, I rely on the possession 11 receipt at Exh. 84 issued by the responsible Officer of the acquiring body and come to the conclusion that then possession of the lands was taken on 1/7/1994. Hon'ble Apex Court, in the case of Siddappa Vasappa Kuri and another vs. Special Land Acquisition Officer and another 9AIR 2001,SC 2951),while interpreting Section 23A of the Land Acquisition Act, held: “It is clear from S. 23 (1A) that the starting point for the purposes of calculating the amount of additional compensation to be awarded thereunder, at the rate of 12 per cent per annum on the market value, is the date of publication of the S.4 notification. The terminal point for the purpose is either the date of the award or the date of taking possession, whichever is earlier. In the present case, the possession of the land having been taken prior to the publication of the Sec. 4 notification that terminal is not available. The only available terminal is the date of the award. Therefore, where possession of land was taken on 1st June, 1977 and notification under S. 4 (1) in relation to the said land was issued thereafter on 8th March, 1991 the owners were entitled to additional compensation under S. 23 (1A) from date of S.4 notification viz. 8th March, 1991 to the date of Award namely 6th Feb. 1992. The owners were not entitled to additional compensation from the date on which possession of land was taken viz. 1st June, 1977 to the date on which, S.4 notification was issued”. 10. The State apparently had not put forward any substantive plea or arguments in support of the contention that the benefit of Section 23 (1A) should be given to the claimants from the date of the award and not from the date of possession 1st July, 1994. It can hardly be disputed that in terms of the language of Section 23 (1A) of the Act, additional benefit has to be granted to the claimants from the date of notification under Section 4 of the Act till the date of possession or the date of the Award whichever is earlier. Section 23 (1A) of the Act reads as under: “ 23. Matters to be considered in determining compensation:- ..... ...... .... 12 (1A) In addition to the market value of the land, as above provided, the Court shall in every case award an amount calculated at the rate of twelve per cent per annum on such market-value for the period commencing on and from the date of the publication of the notification under Section 4, sub-section (1) in respect of such land to the date of the award of the Collector or the date of taking possession of the land, whichever is earlier. Explanation- In computing the period referred to in this sub-section, any period or periods during which the proceedings for the acquisition of the land were held up on account of any stay or injunction by the order of any Court shall be excluded. A bare reading of the above provision shows that the additional benefit is admissible in law and payable to the claimants for the period commencing from the date of publication of notification Section 4 of the Act till possession or date of award whichever is earlier. The most important expression in the provision of Section 23 (1A) wherever the additional benefit is to be given till the date of possession is “possession”. The word “possession” has been explained differently in different contexts. In the Law Lexicon, 1977 Edition, the word “possession” defines thus: “Possession referred to in S. 14 need not be actual physical possession or personal occupation of the property by the Hindu female but may be possession in law. The possession of a licensee, lessee or a mortgagee from the female owner or the possession of a guardian or a trustee or an agent of the female owner would be her possession for the purpose of S. 14. The word “possessed” is used in S. 14 in a broad sense and in the context possession means the state of owning or having in one's hands or power. Kotturuswami v. Setra Veeravva,AIR 1959 SC 577, 581.” “The word “possession” in the section cannot possibly be held to mean anything other than lawful possession or possession as owner. The meaning of the word 13 “possession” cannot be limited to actual possession. The possession of a licensee, lessee or mortgagee from a female owner or the possession of a guardian or trustee or an agent of the female owner would be her possession for purposes of S. 14 Mst. Bakhtawari v. Sadhu Singh, 1959 Punj 558, 560”. “Possession” defined (See also Continuous possession, recorded possession) Act 45, 1860, S. 27 : Act 2, 1876, S. 3: Bom Act 2, 1890, S 3 (o); Bur. Act 4, 1898, S. 4 (8). 1. Physical control, whether actual or in the eyes of law, over property, the condition of holding at one's disposal (S. 66 T.P. Act) 2. the area in one's possession (S. 37 Indian Evidence Act). Possession is a detention or enjoyment of a thing which a man. Holds or exercises by himself or by another, who keeps or exercises it in his name. “Possession” is said to be in two ways- either actual possession or possession in law. “Actual possession” is when a man entreth into lands or tenements to him descended, or otherwise. “Possession in law, is when lands or tenements are descended to a man, and he hath not as yet really, actually, and in deed entered into them ; And it is called possession in law because that in the eye and consideration of the law, he is deemed to be in possession, inasmuch as he is liable to every mans action that will sue concerning the same lands or tenements (Termes de la ley, Possession).” 11. The Supreme Court on “Words and phrases, published by Ashoka Law House, Edition 2004, at page 812, the “possession” has been described as under: “Possession” is a polymorphous term, which may have different meaning in different contexts. It is impossible to 14 work out a completely logical and precise definition of “possession” uniformally applicable to all situations in the contexts of all statutes. Dias and Hughes in their book on Jurisprudence say that if a topic ever suffered from too much theorizing it is that of “possession”. Much of this difficulty and confusion is (as pointed out in Salmond' s Jurisprudence, 12th Edition, 1966) caused by the fact that possession is not purely a legal concept. “Possession”, implies a right and a fact; the right to enjoy annexed to the right of property and the fact of the real intention. It involves power of control and intent to control (See Dias and Hughes, ibid.) According to Pollock and Wright, when a person is in such a relation to a thing that, so far as regards the thing, he can assume, exercise or resume manual control of it at pleasure, and so far as regards other persons, the thing is under the protection of his personal presence, or in or on a house or land occupied by him or in any receptacle belonging to him and under his control, he is in physical possession of the thing. While recognizing that “possession” is not a purely legal concept but also a matter of fact, Salmond (12th Edition, page 52) describes “possession”, in fact, as a relationship between a person and a thing. According to the learned author the test for determining “whether a person is in possession of anything is whether he is in general control of it.” The question whether a particular person is or continues to be in possession of an arm (in the context of the Arms Act) is, to a substantial extent, one of fact. This question, often resolves into the issue; whether that person is or continues to be, at the material time, in physical possession or effective control of that term. This issue, in turn, is a mixed issue of fact and law, depending on proof of specific facts or definite circumstances by the prosecution. Superintendent and Remembrancer of Legal Affairs, West Bengal v. Anil Kumar Bhuna and others, (1979) 4 SCC 274: AIR 1980 SC 52 (See also Seksaria Cotton Mills Ltd. v. State of Bombay, AIR 1953 SC 278). The expression “possession” is a polymorphous term, which assumes different colours in different contexts. It may carry different meanings in contextually different backgrounds. The word “possession” means the legal 15 right to possession. Madan Lal and another v. State of H.P. (2003) 7 SCC 465. It is impossible to work out a completely logical and precise definition of “possession” uniformally applicable to all situations in the context of all statutes. Megh Singh v. State of Punjab (2003) 8 SCC 666. The word “possession” has different shades of meaning and it is quite elastic in its connotation. “Possession” and 'ownership' need not always go together but the minimum requisite element, which has to be satisfied, is custody or control over the goods. Avtar Singh and others v. State of Punjab (2002) 7 SCC 419 ( See also Madan Lal v. State of H.P. (2003) 7 SCC 465.” 12. The possession is a legal right and it must arise legally. For possession to be accepted in law, the Court should be satisfied that possession has been acquired by the concerned party by due process of law and is not result of an unlawful act. Now let us examine the legislative scheme in relation to taking over of possession by the Government or its agencies under the provisions of the Act. The provisions of the Act contemplate only two methods for acquiring possession in accordance with law. Firstly, the Government acting through the Collector and after issuance of the notification under Section 4 and declaration under Section 6 of the Act is required to serve notice to all interested persons under Section 9 (1) of the Act informing that the Government intends to take possession of the land and interested persons may make their claim for compensation in such land to him. The Collector thereupon shall conduct an enquiry as contemplated under Section 11 of the Act and make his award determining the market value of the acquired land. It is only after this procedure is completed that the Collector is entitled to take possession as per the provisions of Section 16 of