IN THE HIGH COURT OF GUJARAT AT AHMEDABAD FIRST APPEALS No. 78 to 117 of 1990 with CROSS OBJECTION Nos. 3330 to 3342 of 1990 with CROSS OBJECTION NOS. 3168 to 3184 of 1990 with CROSS APPEALS NO. 2511 to 2520 of 1992. For Approval and Signature: Hon'ble MR.JUSTICE J.M.PANCHAL and MR.JUSTICE M.H.KADRI ============================================================ 1. JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ to see the judgements? No 2. To be referred to the Reporter or not? No 3. Whether Their Lordships wish to see the fair copy of the judgement? No 4. Whether this case involves a substantial question of law JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ of India, 1950 of any Order made thereunder? No 5. Whether it is to be circulated to the Civil Judge? No -------------------------------------------------------------- OFFICER ON SPECIAL DUTY, LAND ACQUISITION Versus CHIMANLAL JERAMBHAI PATEL -------------------------------------------------------------- Appearance: 1. FIRST APPEALS No. 78 to 82, 91, 95, 96, 100, 101, 103,105,109,111,114 to 117 of 1990 MR.UMESH A.TRIVEDI, A.G.P. for appellants MR RM VIN for Respondent No. 1 MR MG NAGARKAR for Respondent No. 2 2. FIRST APPEALS NO. 83 to 90, 92, 93, 94, 97, 98, 99, 102, 104, 106, 107, 108, 110, 112 & 113 of 1990. MR PRASANT G.DESAI, G.P. for the appellants. MR RM VIN, for respondent no.1 MR MG NAGARKAR, for respondent no.2 3. CROSS OBJECTION No. 3330 of 1990 MR RM VIN for Objector MR UMESH A.TRIVEDI, A.G.P. for Respondent No. 1 MR MG NAGARKAR,for respondent no.2. 4. CROSS OBJECTIONS NO. 3331 to 3342 of 1990 MR RM VIN for objectors MR PG DESAI, G.P. for respondent no.1 MR MG NAGARKAR for respondent no.2. 5. CROSS OBJECTIONS NO.3168 to 3184 of 1990 MR PRANAV G.DESAI for Objectors MR UMESH A.TRIVEDI, A.G.P.for respondent no.1 MR MG NAGARKAR, for respondent no.2. 6. CROSS FIRST APPEALS NO.2511 to 2520 of 1992 MR RN SHAH, advocate for the appellants. MR BD DESAI, AGP for respondent no.1 MR MG NAGARKAR for respondent no.2. -------------------------------------------------------------- CORAM : MR.JUSTICE J.M.PANCHAL and MR.JUSTICE M.H.KADRI Date of decision: 20 /11/98 ORAL JUDGEMENT (Per : Panchal, J.) First Appeals No.78/90 to 117/90 are filed by the Officer on Special Duty, Land Acquisition, Ahmedabad under section 54 of the Land Acquisition Act, 1894 read with section 96 of the Code of Civil Procedure, 1908 against common judgment and award dated April 5, 1989 rendered by the learned 2nd Extra Assistant Judge, Bharuch, in Land Acquisition Reference Cases No.35/85 to 50/85 and 52/85 to 74/85 which were consolidated with Land Acquisition Reference Case No. 51/85. In First Appeals No. 78, 79, 81, 82, 85, 86, 87, 91, 92, 95, 96, 99, 101, 103, 104, 105, 106, 107, 108, 109, 110, 111, 112, 113, 114 and 115, all of 1990, Cross-Objections are filed by the original claimants under the provisions of Order-41 Rule-22 C.P.C.; whereas claimants in Land Acquisition Reference Cases No.39/85, 40/85, 44/85, 45/85, 46/85, 49/85, 50/85, 54/85, 55/85 and 59/85 have filed cross appeals in First Appeals No.83/90, 84/90, 88/90, 89/90, 90/90, 91/90, 94/90, 97/90, 98/90 and 102/90 respectively. Their numbers are First Appeals No. 2512, 2519, 2518, 2517, 2516, 2515, 2514, 2511, 2520 and 2513 all of 1992 respectively. As all these proceedings arise out of common judgment and award rendered by the Reference Court, we propose to dispose of them by this common judgment. 2. The facts in nut-shell are that acquisition proceedings were initiated for acquiring lands of village Bhadkodara, Taluka Ankleshwar, District : Bharuch for expansion of Ankleshwar Industrial Estate. For this purpose, notification under section 4 of the Land Acquisition Act, 1894 ("the Act" for short) was published in Government Gazette on March 30, 1979. The interested persons were issued notices, who had filed objections. After considering the objections, Land Acquisition Officer had submitted report under section 5(A)(2) of the Act to the State Government. On consideration of the report submitted by the Land Acquisition Officer, the State Government was satisfied that the lands mentioned in notification which was issued under section 4 of the Act were needed for expansion of Ankleshwar Industrial Estate and, therefore, declaration under section 6 of the Act was made on November 13, 1981 which was also published in Government Gazette. Thereafter all the interested persons were served with notices under section 9(3) as well as section 9(4) of the Act. The land owners appeared before the Land Acquisition Officer and claimed compensation at the rate of Rs. 1,25,000/per Hectare i.e. Rs.1250/- per Are. After hearing the parties, Officer on Special Duty offered compensation to the land owners at the rate of Rs. 22,000/- per Hectare i.e. Rs. 220/per Are by award dated March 29, 1984. The land owners were not satisfied with the offer made by the Officer on Special Duty and were of the opinion that compensation offered was insufficient and inadequate. Therefore, they sought references to the Court. Accordingly, references were made to the District Court, Bharuch, which were registered as Land Acquisition Reference Cases No. 35/85 to 74/85. Before the Reference Court, the claimants claimed compensation at the rate of Rs. 1,250/- per Are. The Land Acquisition Reference Cases No.35/85 to 50/85 and 52/85 to 74/85 were consolidated with Land Acquisition Reference Case No. 51/85. In the reference applications,it was stated by the claimants that Officer on Special Duty (Land Acquisition) had not considered sale instances of nearby lands of the same village while determining the market value of the lands on the date of publication of notification under section 4 of the Act and having regard to potentiality of the lands acquired as well as development of industries in the area, they were entitled to compensation at the rate of Rs. 1,250/per Are. 3. The reference applications were contested by the State Government by filing reply. It was stated in the written statement that references were time barred and, therefore, liable to be rejected. It was claimed that after receipt of notices under section 9 of the Act, the claimants had not produced sale instances in support of their claim for fixation of compensation at the rate of Rs. 1250/- per Are and as they had unconditionally accepted the compensation, reference applications should be dismissed. It was also pleaded that the claimants having failed to submit claims before the Land Acquisition Officer pursuant to notices under section 9 of the Act, their references for additional compensation were not maintainable in view of the provisions of section 25 of the Act. 4. Reply to the reference applications was submitted by the acquiring body i.e. Gujarat Industrial Development Corporation at Exh.13. It was stated therein that as the compensation offered by the Officer on Special Duty (Land Acquisition) was reasonable and proper, the reference applications should not be entertained. It was stressed that the demand of the claimants was very high and in view of the disadvantageous situation of the acquired lands, references were liable to be rejected. It was claimed that the acquired lands were far away from Ankleshwar Railway Station as well as Bus Stand and, therefore, the claimants were not entitled to additional compensation as claimed in the reference applications. 5. Having regard to the pleadings of the parties, necessary issues for determination were raised by the Reference Court. The claimants examined witness Chimanlal Jerambhai Patel at exh.59 in support of their claim advanced in reference applications. They also examined witness Jamolbhai Hirabhai at Exh.91 to substantiate their claim for higher compensation. The claimants produced judgments rendered by the Reference Court in respect of lands situated in villages Kosamadi, Bhadkodara and Gadkhol of Ankleshwar Taluka at Exhs. 22, 46 and 47 respectively. They also relied upon certified copies of entries made in the Index register which were made available to them by Office of Sub-Registrar, Ankleshwar under section 57 of the Registration Act, 1908 and produced them at Exhs. 60,61, 62, 63, 64, 65, 66, 67 and 92. Witness Jamolbhai Hirabhai, whose evidence was recorded at Exh.91, produced certified copy of the entry made in the Index register relating to sale of survey No. 205/1 of village Bhadkodra by deed dated March 2, 1982 executed in favour of M/s. Dattani Development Corporation at Exh.93. 6. After hearing the learned Advocates appearing for the parties and considering the evidence adduced, the Reference Court held that Exh. 92 which is entry from Index register relating to a lease deed of land of village Bhadkodra, was not helpful for determining compensation, as the land was leased by G.I.D.C. to Jaldarshan Society after its development. So far as Exh.93 is concerned, it was observed by the Reference Court that the sale instance was of the year 1982 and related to non-agricultural land of village Bhadkodara and, therefore, was not relevant for the purpose of determining market value of the acquired lands. The Reference Court noted that the sale instance produced at Exh.67 showed that price of lands in village Bhadkodara in the year 1981 was Rs. 11.47 ps. per sq.mt. i.e. Rs. 1147/- per Are; whereas Exh.46 which was previous award relating to acquisitiion of lands situated in village Bhadkodra showed that market value of the lands was Rs. 350/- per Are in the year 1977. The Reference Court was of the opinion that normally non-agricultural land fetches double the price than that of agricultural land and, therefore, after deducting half the price, held that market value of the acquired lands situated in village Bhadkodra would be Rs. 575/- per Are in the year 1981. As the notification under section 4 of the Act was of the year 1979, Reference Court was of the opinion that 15% should be deducted from the market value of the lands situated in village Bhadkodara which was assessed for the year 1981 and deduced that the value of the acquired lands would be Rs. 525/- per Are in the year 1979. The Reference Court also heavily relied upon the award delivered by the Court which was produced at Exh.46 for the lands situated in village Bhadkodra. By the said judgment, compensation at the rate of Rs. 350/- per Are was determined for the lands situated in village Bhadkodara. In view of the time lag between the notifications issued under section 4 of the Act, the Reference Court was of the opinion that 15% rise in price should be given while determining market value of the acquired lands and, therefore, compensation payable to the claimants on the basis of said award would be at the rate of Rs. 455/per Are. The Reference Court thereafter considered potentiality of the lands acquired and noted that the lands acquired could be used either for building purpose or industrial purpose and, therefore, the claimants were entitled to a further rise in price to the extent of 35%. Thus, the Reference Court in ultimate analysis determined compensation payable to the claimants at the rate of Rs. 590/- per Are. The Reference Court further held that notification under section 4 of the Act was issued on March 30, 1979; whereas award was made by the Land Acquisition Officer on March 29, 1984 and, therefore, the claimants were entitled to 30% solatium under section 23(2) of the Act on the market value of the lands as well as interest at the rate of 12% per annum on the market value from the date of issuance of notification under section 4 of the Act till making of the award. The Reference Court also held that the claimants were entitled to interest on the market value of the lands acquired at the rate of 9% per annum for the first year from the date of taking possession of the lands and for subsequent period at the rate of 15% per annum till the date of payment. The above referred to directions contained in judgment and award dated April 5, 1989 of the Reference Court have given rise to present appeals by State Government as well as Cross-Objections and cross-appeals by original claimants. 7. Mr.P.G.Desai, learned Government Pleader and M/s. B.D.Desai and U.A.Trivedi, learned Assistant Government Pleaders contended that the offer made by the Special Land Acquisition Officer was just as well as adquate and, therefore, enhanced compensation should not have been awarded to the claimants by the Reference Court. It was claimed that though awards rendered by the Reference Court in respect of similar lands may be relevant for the purpose of determining market value of lands acquired in this case, Exh.22 which is judgment of the Court rendered on October 29, 1988 relating to acquisition of lands situated in village Kosamadi, should not be relied on, as it has not become final and is subject matter of challenge in First Appeals No. 779/89 to 788/89 which are pending and are yet not disposed of. It was pleaded by the Government Counsel that judgment of the Court dated August 27, 1980 which is produced at Exh.46 and which relates to determination of market value of lands situated in village Bhadkodra indicates that the price determined was Rs. 350/- per Are as on the date of section 4 notification which in that case was March 17, 1978 and as those lands were near National Highway No.8 and Railway Station, the said award should not be taken into consideration for determining the market value of the lands acquired in the present case. It was stressed that Exh.47 which is judgment of the Reference Court with regard to lands situated in village Gadkhol shows that price of the lands situated in village Gadkhol on the date of section 4 notification i.e. September 1, 1978 was Rs.450/- per Are; whereas in the present case, notification under section 4 was issued on March 13, 1979 but, in view of distance between the two villages, appropriate deductions should be made before relying upon the said award. It was asserted that the evidence of witness Jamolbhai Hirabhai Exh.91 does not show reasons or factors which prompted M/s. Dattani Development Corporation to pay price of Rs. 83,700/- for land admeasuring 1 Acre 32 Gunthason March 2, 1982 and as said land was of great advantage to the purchaser and as the purchaser had paid a special price for it, evidence of witness Jamolbhai should not be relied on for the purpose of determining the market value of the lands acquired in the present case. It was submitted that determination of compensation by the Reference Court is very much excessive and, therefore, the award made by the Reference Court should be set aside. In the alternative, it was pleaded that notification under section 4 of the Act was issued on March 30, 1979; whereas possession of the lands was taken on July 19, 1979 and the award was made by the Land Acquisition Officer on March 29, 1984 and, therefore, as the date of taking possession of the lands is earlier than the date of taking over possession of the lands, the Reference Court was not justified in directing the appellants to pay interest at the rate of 12% on the amount of compensation from March 30, 1979 to March 24, 1984 (the correct date should be March 29, 1984) in view of the provisions of Section 23(1-A) of the Act and, therefore, the award deserves to be modified accordingly. It was also pleaded that direction to pay interest at the rate of 9% per annum for the first year and for subsequent period till the date of payment at the rate of 15% per annum on amounts envisaged under sections 23(1-A) and 23(2) of the Act should be set aside in view of decision of Supreme Court in State of Maharashtra v. M.S.Hatkar, JT (1995) 2 S.C. 583. 8. M/s. R.M.Vin, Pranav G.Desai and M.R.Shah, learned Counsel for the claimants submitted that the evidence of witness Jamolbhai Hirabhai Exh.91 read with Exh.93 which is certified copy of entry from Index register relating to sale of Survey no.205/1 of village Bhadkodara shows that the market value of agricultural land of village Bhadkodara in the year 1979 was Rs. 1150/- per Are and, therefore, the appeals filed by the State Government should be dismissed; whereas Cross-Objections and Cross Appeals filed by the claimants should be allowed. It was claimed that judgment of the Court dated October 29, 1988 produced at Exh.22 which relates to determination of compensation of the land situated in village Kosamadi furnishes reliable guideline for the purpose of determining market value of the lands acquired in this case and as price of the land determined as on October 7, 1980 which was the date of notification under section 4 of the Act in that case, was Rs. 750/per Are, the appeals filed by the State Government should be dismissed. It was pleaded that Exh.46 indicates that the market value of the land of village Bhadkodara on the date of issuance of Section 4 notification in that case which was March 17, 1978 was more than Rs. 350/- per Are, but as the claim was confined to Rs. 350/- per Are, Court had awarded the said amount as compensation and, therefore, having regard to development which had taken place near village Bhadkodara and other factors and in view of the fact that notification under section 4 of the Act in the present case was issued on March 30, 1979, the appeals and cross-objections filed by the claimants should be allowed. What was stressed was that Exh.47, which is judgement of the Reference Court, indicates that compensation for lands situated in village Gadkhol on the date of Section 4 notification i.e. September 1, 1978 was determined at the rate of Rs. 450/per Are and as notification in the present case under section 4 was issued on March 30, 1979, the appeals filed by the State Government deserve to be dismissed; whereas the cross appeals and cross-objections filed by the claimants deserve to be allowed. 9. We have been taken through the entire evidence on record by the learned Counsel appearing for the parties. We may state that the claimants who are represented by Mr. R.M.Vin, learned Senior Counsel have confined their claim to Rs.1000/- per Are in cross-objections; whereas others have claimed compensation at the rate of Rs. 1250/- per Are. In this case, notification under section 4 of the Act was issued on March 30, 1979 and, therefore, market value of the lands acquired will have to be determined as on crucial date of publication of notification under section 4 of the Act, which is March 30, 1979. The factors which have to be borne in mind while determining market value of the lands are as under :- (1) Determined as on the crucial date of publication of the modification under S.4 of the Land Acquisition Act (dates of notifications under Secs.6 & 9 are irrelevant). (2) Determination has to be made standing on the date line of calculation (date of publication of notification under section 4) as if the valuer is hypothetically 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 lands at a reasonable price. (3) In doing so by the instances method, the Court has to corelate the market value reflected in the most comparable instance which provides the index of market value. (4) Only genuine instances have to be taken into account. (Sometimes instances are rigged up in anticipation of acquisition of land). (5) Even post-notification instances can be taken into account, (1) if they are very proximate, (2) genuine and (3) acquisition itself has not motivated the purchaser to pay a higher price on account of the resultant improvement in development prospects. (6) Most comparable instances out of the genuine instances have to be identified on the following consideration: (i) proximity from time angle (ii) proximity from situation angle. (7) 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 adjustment for the plus and minus factors vis-a-vis land under acquisition by placing the two in juxtaposition. (8) A balancesheet of plus and minus factors may be drawn for this purpose and the relevant factors evaluated in terms of price variation as a prudent purchaser would do. (9) 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. The exercise indicated in clauses (1) to (10) has to be undertaken in a common sense manner as a prudent man of the world of business would do. We may illustrate some such illustrative (not exhaustive) factors- Plus factors: 1. smallness of size. 2. proximity to a road. 3. frontage on a road 4. nearness to developed area. 5. regular shape. 6. level vis-a-vis land under acquisition. 7. special value for an owner of an adjoining property to whom it may have some very special advantage. The evaluation of these factors, ofcourse 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 road, leaving open space, ploting 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 approximately between 20% to 50% to account for land required to be set apart for carving out lands and ploting out small plots. The discounting will to some extent also depends on whether it is a ruler area or urban 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 attendant hazards. These are general guidelines to be applied with understanding informed with common sense. 10. The claimants examined witness Jamolbhai Hirabhai at Exh.91. His evidence indicates that he was owner of survey no.205/1 situated in the sim of village Bhadkodara. The land owned by him admeasured 1 Acre 32 Gunthas i.e. 72 Are and 84 sq.mts. According to him, an agreement to sell was executed in the year 1979 and the land was sold by registered sale deed dated March 2, 1982 to M/s. Dattani Development Corporation for a sum of Rs. 83,700/-. He produced typed copy of sale deed at mark 89/2,but as neither original sale deed nor certified copy of sale deed was produced, the same was not exhibited by the Reference Court. He also produced xerox copy of entry from Index register issued to him under the provisions of Registration Act relating to sale of survey no.205/1 at Exh.93. In cross-examinatioin he admitted that the land was of great advantage to the purchaser, as it was adjacent to G.I.D.C. He was not able to inform the Court as to which circumstances prompted the purchaser to purchase the said land. He admitted that after execution of agreement to sell, land was converted into non-agricultural land and thereafter sale deed was executed. He also admitted that he was not maintaining any accounts regarding his income. On behalf of the original claimants, civil application No.10785/98 has been filed seeking permission of the Court to produce certified copy of the entry from Index register relating to sale of Survey No. 205/1 situated at village Bhadkodara as additional evidence. It was ordered to be heard with main matter and we have also heard the learned Counsel appearing for the parties on the question of