-1- IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION FIRST APPEAL NO. 2222 OF 2007 with FIRST APPEAL NOS. 1505 TO 1551 OF 2007 with FIRST APPEAL NO. 59 OF 2008 with CIVIL APPLICATION NOS. 3565, 3255, 3570 & 3590 OF 2007 1. The State of Maharashtra ) (Through the Special Land Acquisition Officer, ) Dushkal No.1, Nashik) ) 2. The Executive Engineer, ) Kadava Project, Sinnar, Tal. Sinnar, ) Dist. Nashik. )..Appellants versus 1. Valu Yesu Suryavanshi (Nhavi) Adult ) 2. Venubai Dagadu Tupe, adult. ) 3. Smt. Bakubai Walu Kadave, adult. ) 4. Bhaskar Walu Gaikar, adult ) 5. Phulabai Damu Ambekar, adult ) No.1 for himself and GPA holder for Nos. 2 to 5 ) R/o Nandadgaon, Tal. Igatpuri, Dist. Nasik. )..Respondents Mr. K.K. Tated, Additional Government Pleader, for the appellants in F.A. Nos. 2222 of 2007 and 1505 to 1536 of 2007. Mr. S.R. Borulkar, Government Pleader, for the appellants in F.A. Nos. 1537 to 1551 of 2007 and 59 of 2008. S/Shri K.B. Sonwalkar, J.H. Ahuja, P.J. Ahuja along with Jitendra Sachdev in FA Nos. 1506 to 1511, 1513 to 1519, 1521 to 1525, 1537 to 1540 and 1543 of 2007and S.M. Gorwadkar in FA Nos. 2222, 1505, 1526 to 1530, 1532, 1533, 1536, 1544 to 1548 of 2007 for the respondents. -2- CORAM: SWATANTER KUMAR, C.J. & J.P. DEVADHAR, J. Judgment reserved on : January 15, 2008 Judgment delivered on: January 17, 2008 JUDGMENT (Per Swatanter Kumar, C.J.): All the above 49 First Appeals are directed against the comon judgment and award dated 23rd September, 2005, made by the IInd Ad-hoc Additional District Judge, Nashik. As identical question of fact and law arise in these appeals, it will be appropriate to dispose of these appeals by a common judgment. 2. The relevant facts are that Special Land Acquisition Officer (“SLAO”) published a notification under Section 4 of the Land Acquisition Act, 1894 (hereinafter referred to as “the Act”) for acquiring lands from different villages including Nandadgaon, Tal. Igatpuri, Dist. Nashik for construction of Mukane Dam Project. It may be noticed that lands from number of other villages had also been acquired by different notifications. The possession of the land under the Award was taken on 1st July, 1994, of course, except mentioning by the State there is no evidence on record, documentary and oral, to show as to how and when the possession was taken. However, we will proceed to decide -3- even this aspect on the basis of the record before the Court. 3. The SLAO had issued a declaration under Section 6 of the Act on 3rd August, 1994. After hearing the owners of the land, the SLAO made and published his award on 8th August, 1995. Vide this award, uniform compensation was awarded to the claimants at the rate of Rs. 55,500/- per hectare, however, in one or two cases the compensation was awarded by the Collector varying between Rs. 40,000/- and Rs. 83,000/-. The claimants being dissatisfied from the awarded compensation preferred references under Section 18 of the Act which were referred by the SLAO to the Reference Court. After permitting the parties to lead evidence, the Reference Court vide its judgment dated 23rd September, 2005, allowed the enhancement and awarded a sum of Rs. 1,71,778/- per hectare uniformly to all the claimants. Aggrieved from the judgment of the Reference Court, the State has filed all the above 49 appeals. Though the claimants had demanded compensation at the rate of Rs. 4,00,000/- per hectare for bagayat land and Rs. 1,00,000/- per hectare for pot kharab land before the Reference Court, they have not preferred any appeals or cross- appeals before this Court. -4- 4. The contentions raised on behalf of the State are that (a) the Reference Court has awarded excessive compensation, (b) the Reference Court could not have awarded enhancement on the value of the land indicated in sale instance Exhibit-23, and (c ) the findings of the Reference Court are not based upon proper evidence. 5. Vide Exhibit-23, land admeasuring about 32 ares had been sold on 2nd January, 1990 which obviously means that a small piece of land was sold and the learned Reference Court ought to have made some deduction on account of the fact that the present case was of large acquisition and value indicated for a small size plot would not be a correct basis for determination of fair market value of the land. According to the learned Government Pleader, at least 25 per cent should have been deducted. Lastly that the Reference Court has erred in law in granting benefit of Section 23 (1A) to the claimants from the date of notification till the date of award. In the facts and circumstances of the case, the benefit could accrue and ought to have been granted by the Court only upto the date of taking possession which was on 1st July, 1994. 6. The first two arguments raised by the State in the present -5- appeals can be discussed together. The State had led no evidence before the Reference Court. The document at exhibits-23, 38, 39, 48, 49 and 83 is the evidence produced by the claimants. In addition to this documentary evidence, they had also examined Deoram Khandu Khatale (P.W.1), one of the claimants as a witness, whose statement is at Exhibit-19 on record. This witness had stated that his lands were of high quality. He used to take two or three crops in a year. He specifically stated that the lands were of similar quality as that of the surrounding villages viz. Vadivarhe, Muken, Morale, Sanjegaon, etc. While describing the location of the land and its potential, this witness has stated that a hospital, school and electric supply are there. He had filed 7/12 extracts in respect of the lands. Agra Road is stated to be at a distance of 8 Kilometres from the village. In his cross-examination he had admitted that possession of the land was taken on 1st July, 1994. The learned Reference Court rejected all other evidence for different reasons. It also declined to take into consideration the judgment at Exhibit-83 as it related to the lands located in village Mukane. Exhibit- 49 which was a sale deed dated 5th March, 1992 from the same village i.e. Nandadgaon was rightly not looked into by the Reference Court or made the basis for determination of compensation as the price indicated in that sale deed was even below the compensation awarded -6- by the Collector. The judgment of the Reference Court is entirely based upon copy of sale deed Exhibit-23. The learned Government Pleader appearing for the State and the counsel appearing for the claimants also agreed that there was no direct, relevant and comparable piece of evidence on record from the same village except Exhibit-23 and that could safely be made the basis for determination of fair market value of the land on the relevant date i.e. 23rd May, 1994. Exhibit-23 is the sale deed dated 2nd January, 1990 vide which land admeasuring 32 ares from Gat No. 155 was sold for a sum of Rs.40,000/-. This sale deed was produced by Nivrutti s/o Kisan Randive (P.W.2), who is the purchaser of the land in question. On this basis, the value of the lands would be at the rate of Rs. 1,22,699/- per hectare. The learned Reference Court had, while taking this as a base value for the year 1990 for each subsequent year till the date of notification under Section 4 of the Act, increased the value at the rate of 10 per cent per year and without making any deduction awarded the sum of Rs. 1,71,778/-. In this regard, the Court had relied upon the judgment of the Supreme Court in the case of L.A.O vs. Mohammad Ali, AIR 2002 SC 1558. The learned Reference Court did not treat Exhibit-23 as a sale instance relating to a small piece of land. In fact, as it appears from the record, State had never objected or raised this issue before the Reference -7- Court. Once no issue was raised before the Reference Court, it would hardly be permissible for the State to raise this point for the first time in appeal before this Court. Furthermore, 32 ares is very close to an acre as 40 ares make an acre. Thus, it cannot be treated such a small piece of land that it would justify application of principle of deduction on the basis of smallness of land subject matter of sale. Even otherwise, the Court has to keep in mind that the value of the land increases and the claimants in fact had claimed compensation at the rate of Rs. 4 lakhs per hectare. The extent of land, which is subject matter of Exhibit-23 , thus cannot be termed as such a small piece of land, that deduction at the rate of 25 per cent should be applied in the facts and circumstances of the present case. It is an admitted fact that the lands of surrounding villages had already been acquired. The State has not produced any evidence on record to show that it will be either unreasonable or unfair to grant increase to the claimants at 10 per cent. Exhibit-23 had shown the value at the rate of Rs. 1,22,699, while Exhibit-39 which was a sale deed of 29th January, 1992 relating to village Mukane had shown the value at the rate of Rs. 2,12,500/- per hectare. This sufficiently indicates that there was an increasing trend in the sale price of the land of the surrounding villages of village Nandadgaon. The increase given by the Reference Court, in such circumstances, is neither unreasonable -8- nor excessive, examined in the light of the basic features contained in Section 23 of the Act. 7. The Delhi High Court in the case of Smt. Omwati vs. Union of India and another(L.A. Appln. No. 94/2006) reported in 2006 (90) DRJ 324, dealing with the factors to be considered for awarding compensation held as under. “The learned counsel appearing for the respondent, Union of India , while relying on the judgment of the Supreme Court in the case of Virender Singh vs. Union of India, 2003 (X) SCC 86 argued that small pieces of land cannot at all be looked into by the courts while determining the compensation payable to the claimants for acquisition of vast stretches of lands. Firstly, this is, in our view not a correct reading of the judgment of the Supreme Court and secondly, the facts of that case were entirely different. Their Lordships of the Supreme Court held that “small bit of transaction would not be determinative factor for deciding the market value of vast stretch of land” where the land was acquired to the extent of 5,484 bighas and only one bigha vide Exh. A1 was made the basis for awarding the compensation by the Court, and the same was not accepted by the Supreme Court. In the present case, the acquisition is only nof 971 bighas but the sale instances placed on record by the claimants as well as the respondents were of land measuring 1 bigha to 4 bighas, as such these sale deeds cannot be treated at parity 2ith Exh.A1 (in the case of Ramphool and another vs. Union of India, 1998 V AD (Delhi) 433). It will be impracticable to imagine that the claimants or even respondents are expected to tender evidence of sale transactions where hundreds of bighas have been purchased or sold in acquisition proceedings or even sale of few hundreds of bighas. No individual person and for that matter, even a corporate body would -9- sell or buy the lands in hundreds of bighas in a place like Union Teritory of Delhi, where yards of lands cost thousands of rupees. To require parties to lead such evidence is an illusory submission rather than a pragmatic view. We may also refer to a judgment of the Punjab & Haryana High Court in the case of Baldev Singh vs. State of Haryana, 1999 (3) PLR 141 where the court discussed this aspect as well as the aspect of the notified lands being surrounded by the boundaries of the revenue estates of other villages and its impact on the fixation of the compensation payable. The Court after detailed discussion held as under:- “14. One can hardly trace any element of disparity between the case of Harpal Singh and the present appeals. In both the caases, the lands were acquired by the same notification dated 26.5.1981. Lands were acquired by a common notification in the revenue estates of all the three villages i.e. Patti Mehar, Jandli and Sounda. It is also an admitted case and is equally reflected by the site plans Ex. P.10 and Ex. P.11. The boundaries of the three revenue estates of these villages is common. In other words, the lands of each of these villages are adjacent to other while part of the land of Patti Mehtar prior to the present acquisition was in Municipal Limits. This has been so reflected in the cases of Pala Singh and Sudesh Kumar (Ex.P.9).The lands acquired afe at a distance from the grain market while those places were fully commercialised and developed when the lands in those areas were acquired. Thus, I find it difficult to plainly follow the said criteria for awarding the compensation in the present case. The necessary corollary thereto would be to make a reasonable deduction/cut from such amounts and to implement the rule of uniform compensation as aforeindicated to award the compensation which has been awarded in other connected cases for such -10- similar lands. The lands in other cases are comparable or even somewhat similar. They have been acquired for one and the same purpose and, thus, difference of part of the land from the other land acquired would not be of great significance. 15. For the reasons aforestated, I allow these appeals and enhance the compensation for acquisition of the lands of the land owners to Rs. 2,91,800/- per acre. The land owners claimants would be entitled to statutory benefits under Sections 23 (1-A), 23 (2) and 28 of the Act in accordance with law. However, in the facts and circumstances of the case, there would be no orders as to costs. The appeals are, accordingly, allowed, limited to the above extent.” 16. Even in the case of Ravinder Narain vs. Union of India, AIR 2003 SC 1987, the Court held as under. “ It cannot, however, be laid down as an absolute proposition that the rates fixed for the small plots cannot be the basis for fixation of the rate. For example, where there is no other material it may in appropriate cases be open to the adjudicating Court to make comparison of the prices paid for small plots of land. However, in such cases necessary deductions/adjustments have to be made while determining the prices. 8. In the case of Suresh Kumar v. Town Improvement Trust, Bhopal (1989) (1) SVLR ( C) 399), in a case under the Madhya Pradesh Town Improvement Act, 1960, this Court held that the rates paid for small parcels of land do not provide a useful guide for determining the market value of the land acquired. While determining the market value of the land acquired it has to be correctly -11- determined and paid so that there is neither unjust enrichment on the part of the acquirer nor undue deprivation on the part of the owner. It is an accepted principle as laid down in the case of Vyricheria Narayana Gajapatiraju vs. Revenue Divisional Officer, Vizagapatnam, (AIR 1939 PC 98) that the compensation must be determined by reference to the price which a willing vendor might reasonably expect to receive from the willing purchaser”. 17. Further in the case of Union of India v. Bal Ram and another, AIR 2004 SC 3981, , the Court held as under. “The ground urged before us is that in view of the decision in Kunwar Singh vs. Union of India, 1998 (8) SCC 136 contiguity of villages could not by itself be sufficient to draw an inference of similarity in character of the lands in awarding the compensation and, therefore, the reasoning of the High Court is not correct. The High Court indeed did not rely upon the contiguity of the lands alone but if found that the nature/quality of the lands is by and large similar to those lands considered in Satpal's case. If that is the finding of the High Court, we do not think there would be any justification to make any distinction between lands which had been lying in Palam and Shahbad Mohamadpur. Therefore, the view taken by the High Court cannot be faulted with. The High Court also found that it would be unfair to discriminate between the land owners to pay more to some and less to others when the purpose of acquisition is same and lands are identical and similar, though lying in different villages, we find the judgment of the High Court to be fair and reasonable and no interference is called. Therefore, the appeals stands dismissed.” -12- 18. It may also be noticed that certain principles relating to this aspect were also enunciated by the Supreme Court in the case of The Land Acquisition Officer, Revenue Divisional Officer,Nalgonda (A.P) vs. Morisetty Satyanarayana & Ors. 2002 (1) All India Land Acquisition and Compensation Cases 1. Amongst others it was held that normally, the Court would not consider post notification sale instances and an order based upon such instances may be held to be erroneous. Where the Court basis its findings on sale instances relating to small pieces of lands belonging to different persons, deduction is required to be made. But wherever there is an increase in the market price of the land during the relevant years, then applying the development deduction on these grounds would not be necessary. These principles are to be kept by the Court in mind while determining the compensation payable to the claimants.” It was also contended on behalf of the claimants that the land of each individual is being acquired. Thus the question of acquisition of larger piece of land has no relevance. There are claimants who own small pieces of land while others may be owners of larger chunk of land. There cannot be any straightjacket formula to determine compensation payable to the claimants. Sale instance of nearly an acre of land cannot fairly be termed as a small piece of land. The matters must be examined and evidence must be understood by the Court in its correct perspective and while keeping the ground realities in acquisition matters in mind. A Full Bench of this Court in the case of State of Maharashtra vs. Prashram Jagannath Aute, 2007 (5) Mh. L.J. 403 held -13- that the analytical examination of the principles of law would lead to no other conclusion but that determination of market value of acquired land has to be done on the facts of each case, existing statutory guidelines stated in Sections 23 and 24 of the Act and in the backdrop of judicial pronouncements controlling exercise of jurisdiction under Section 18 of the Act. The learned Government Pleader appearing for the State relied upon a Division Bench judgement of this Court in the case of State of Maharashtra vs. Smt. Fulyabai Kisan Govardhane and others (First Appeal No. 1171 of 2007) decided on 23rd August, 2007, to contend that the judgment would have bearing on the present case and particularly in relation to the deduction of 25 per cent from the awarded compensation. At the very outset, we may notice that that was a judgment on its own facts. Furthermore, in that case the Court had granted compensation only on the basis of Exhibit-42, the sale instance relating to 13 ares of land which was old for Rs. 15,000/- at the relevant time and, therefore, the Court had applied 25 per cent deduction. In the present case, the sale instance is of a large land i.e. nearly an acre, thus on any principle the said judgment would have no application to the facts of the present case. 8. The Supreme Court in a recent decision in the case of -14- Lucknow Development Authority vs. Krishna Gopal Lahoti and others, 2007 (12) SCALE 685, while dealing with the aspect of rate at which small plots are sold held as under: “10. Against the Award, the First Appeal was filed before the High Court. Primarily, it was contended before the High Court that the Tribunal had not properly evaluated the evidence on record and wrongly placed reliance on a sale deed relating to a small piece of land. It was also submitted that without any proper appreciation of materials on record the compensation was enhanced. 11. Stand of the respondents before the High Court was that there was no illegality in the Award passed by the Reference Court. It was submitted that the land was situated near densely populated area having great potential value and the appellate authority is selling the same land at the rate of Rs. 300/- per sq.ft. The reference court on the basis of oral and documentary evidence has awarded compensation at the rate of Rs.6/- per sq.ft. Along with other benefits as provided under the Act. The .High Court found that the claimants had filed number of sale deeds of varying rates ranging between Rs. 10/- per sq.ft. to Rs. 5/- per sq.ft. but the sale deed relating to the plot No. 166 situated at Mahibullahpur was relied upon by the Tribunal and the reasons for enhancing the compensation were assigned which according to the High Court did not call for any interference. The High Court did not find any substance in the plea of the appellant that the sale deed ( Exh. C-38)was unduly relied upon by the Tribunal. It was pointed out that the sale deed is related to a very small piece of land as against the large area of more than 10 bighas involved in the present case. The High Court referred to certain decisions of this Court to hold that while determining the market value of the land, the potentiality of the land is a very material consideration and several factors like location of the land, its surroundings, available facilities thereon in the vicinity, -15- nature of the land have to be taken into account. The High Court also found that there was no similarity between the land which was the subject matter of dispute in land acquisition case No. 204 of 1992 where the rate fixed was Rs. 1.85 per sq.ft.” “16. It cannot, however, be laid down as an absolute proposition that the rates fixed for the small plots cannot be the basis for fixation of the rate. For example, where there is no other material it may in appropriate cases be open to the adjudicating Court to make comparison of the prices paid for small plots of land. However, in such cases necessary deductions/adjustments have to be made while determining the prices. 17. In the case of Suresh Kumar v. Town Improvement Trust, Bhopal (1989) (1) SVLR ( C) 399) in a case where the Madhya Pradesh Town Improvement Trust Act, 1960, this Court held that the rates paid for small parcels of land do not provide a useful guide for determining the market value of the land acquired. While determining the market value of the land acquired it has to be correctly determined and paid so that there is neither unjust enrichment on the part of the acquirer nor undue deprivation on the part of the owner. It is an accepted principle as laid down in the case of Vyricherla Narayana Gajapatiraju vs. Ravenue Divisional Officer, Vizagapatnam (AIR 1939 P.C. 98) that the compensation must be determined by reference to the price which a willing vendor might reasonably expect to receive from