=1= IN IN IN THE THE THE HIGH COURT OF JUDICATURE AT BOMBAY HIGH COURT OF JUDICATURE AT BOMBAY HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORDINARY ORDINARY ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION APPEAL APPEAL APPEAL NO.263 OF 2004 NO.263 OF 2004 NO.263 OF 2004 IN IN IN L.A.R. L.A.R. L.A.R. NO.15 NO.15 NO.15 OF 1978 OF 1978 OF 1978 Municipal Corporation of Gr.Mumbai ...Appellants v/s The Wallace Floor Mills Co.Ltd. ...Respondents Special Land Acquisition Officer (1), Bombay and B.S.D. ...Respondents Mr P.G. Lad with Mr K. Gaikwad for Appellants. Mr U.J. Shah i/b M/s Merdekar and Co. for Respondent No.1. Ms Uma Palsule Desai, AGP for Respondent No.2. CORAM CORAM CORAM : D.K. DESHMUKH AND A.A. SAYED JJ. : D.K. DESHMUKH AND A.A. SAYED JJ. : D.K. DESHMUKH AND A.A. SAYED JJ. DATE DATE DATE : 18TH FEBRUARY 2009 18TH FEBRUARY 2009 18TH FEBRUARY 2009 =2= P.C. :- 1. By this appeal, the appellants challenge the award made by the learned Single Judge of this Court dated 10th October 2003 in land acquisition reference No.15 of 1978. The land of the respondents was acquired under the provisions of the Land Acquisition Act. Section 4 Notification was issued on 7th May 1973. By award dated 10th March 1978, the Land Acquisition Officer fixed the market value at the rate of Rs.140/- per square meter. Being dissatisfied by the value determined by the Land Acquisition Officer, an application under section 18 was made. Therefore, it was referred to the learned Single Judge of this Court. It was registered as land acquisition reference No.15 of 1978. Before the learned Single Judge, the only piece of evidence was valuation report submitted by the valuer and the deposition of the person who had signed the valuation report. The learned Single Judge decided the reference by award dated 10th October 2003. The learned Single Judge by the award impugned has enhanced the amount of compensation. According to the learned Single Judge, payment at the rate of Rs.305/- per square meter would be adequate compensation. The acquiring body is in appeal against the award. =3= 2. The learned counsel appearing for appellants submitted that it is an admitted position that a portion of the property is occupied by the tenants. The learned Single Judge however held that because after acquisition the land will vest in Corporation free from all encumbrances, the fact that the tenants are sitting on the land is to be excluded from consideration while determining the compensation. The learned counsel submits that these observations in the award are contrary to the judgment of the Supreme Court in the case of M.B. Gopala Krishna and ors. v/s The Special Deputy Collector, Land Acquisition, reported in AIR 1996 SC 3149. The learned counsel submits that there are tenants sitting on the land is a relevant consideration while determining what would be the adequate compensation for the land. The leaned counsel further submits that though it is an admitted position that part of the land is occupied by tenants, neither in the valuation report nor in the evidence there is anything disclosed as to how much area is occupied by the tenants, what are the rights of the tenants and how much deduction should be made on account of the fact that part of the land is occupied by the tenants. The learned counsel therefore submits that the evidence adduced on behalf of the claimants seeking enhancement of the compensation was not enough to enable the learned =4= Single Judge to come to the conclusion that the compensation granted in the award of the Special Land Acquisition Officer was not just compensation. 3. The learned counsel appearing for land owners, on the other hand, submits that the valuer has stated in his evidence that a part of the land was occupied by structures. He submits that even assuming that some of the structures were occupied by tenants, the tenants have been given part of the compensation in the award of the Special Land Acquisition Officer which they have not challenged, therefore no deduction should be made because of the occupation of the part of the property by the tenants. 4. Now if in the light of these rival submissions the record of the case is perused, it is clear that it is an admitted position that a part of the property is occupied by the tenants. The learned Single Judge has stated in his award that the fact that part of the property is occupied by the tenants is not relevant for determining the compensation because the Corporation will get the land free from all encumbrances. This does not appear to us to be the correct position. The Supreme Court in its judgment referred hereinabove has clearly observed thus :- =5= "The fact of a tenant in occupation would be an encumbrance and no willing purchaser would willingly offer the same price as would be offered for freehold land. Under those circumstances, the High Court would be right in its conclusion that the land burdened with encumbrances takes lesser price than the freehold land. The encumbrances would operate as a disabling factor to peg down the price when we compare the same with freehold land." . Thus, while determining what would be the just compensation, the fact that a part of the property is occupied by the tenants is relevant consideration. In the present case, perusal of the valuation report shows that the valuer totally ignored the fact that a part of the property is occupied by tenants. In his cross-examination, he admits that part of the property is occupied by tenants, there is nothing in the deposition to show how much property is occupied by the tenants, what is the percentage of land occupied by the tenants, how much deduction should be granted because of the fact that part of the property is occupied by the tenants etc. In other words, though it appears to be clear that because of encumbrances the market price will have to be brought down, there is no evidence on record adduced by the claimant as what should be the percentage =6= of price to be brought down because of this circumstance. Looking at the matter from any point of view, it can be said that the claimants have failed to prove that what would be the adequate market price of the land on the date of the Notification issued under section 4. On the other hand, we find that in the year 1974, the land from the same claimants was acquired by the Corporation. On that land also, there was a sitting tenant viz. the Corporation itself and the Special Land Acquisition Officer while determining the compensation has taken that instance into consideration. The learned counsel appearing for claimants submitted that while arriving at the figure of compensation in that case, the fact that the Corporation itself was a tenant was taken into consideration and in this case, the Corporation was not a sitting tenant and therefore, that price cannot be taken as adequate price. Even if this submission is accepted, then it was for the claimants to lead evidence as to how much deduction will have to be made because the land is occupied by some tenant other than the Corporation. In our opinion, the fact that there are other persons occupying the land as tenants than the Corporation would be relevant but not for the purpose of reducing the amount of compensation because when Corporation is occupying the land, the tenancy of the Corporation is not protected by the Rent Act whereas if there are some other tenants, the rights would be =7= protected by the Rent Act. In this case, it is not necessary to consider this aspect because there is no evidence brought on record by the claimants as to who are the tenants, how old is their tenancy, what is the portion of the land in their possession etc. Taking overall view of the matter therefore, in our opinion, the learned Single Judge was not justified in enhancing the amount of compensation. The award of the learned Single Judge suffers from non-application of mind to a very important aspect of the matter. The judgment of the learned Single Judge is based on untenable considerations. In the result therefore, appeal succeeds and is allowed. No order as to costs. If any amount of enhanced compensation is deposited by the appellants during the pendency of the appeal, the Office shall permit the Corporation to withdraw that amount with accruals if any. . At the request of the learned counsel appearing for respondents - claimants, it is directed that the Corporation be permitted to withdraw the amount after a period of eight weeks from today. . Parties to act on the copy of this order duly authenticated by the Associate / Private Secretary of the Court. =8= . Certified copy is expedited. ( D.K. DESHMUKH J.) ( A.A. SAYED J.)