IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA RFA No. 38 of 2007 with RFA No. 146 of 2006. Reserved on: 22.02.2010 Date of decision: 26.02.2010 RFA No. 38 of 2007 State of Himachal Pradesh and others …Appellants. Versus Shri Sham Lal and others …Respondents. RFA . No. 146 of 2006 State of Himachal Pradesh and others …Appellants. Versus Shri Mohan Singh Thakur …Respondent. Coram The Hon’ble Mr. Justice V.K. Sharma, J. Whether approved for reporting? In RFA No. 38 of 2007 For the appellants: Mr. R.P. Singh, Assistant Advocate General. For respondents No.1 to 5: Mr. B.S. Kanwar, Advocate. In RFA . No. 146 of 2006 For the appellants: Mr. R.P. Singh, Assistant Advocate General. For the respondent: Mr. Dinesh Kumar, Advocate. V.K. Sharma, J. Both these appeals being connected matters arising out of single acquisition proceedings are being disposed of by this common judgment. The lands involved in these cases inter alia amongst other lands belonging to various persons interested including the claimants were acquired under the Land Acquisition Act, 1894, --------------------------------------------------------------------------------------- 1 Whether the reporters of the local papers may be allowed to see the Judgment? 2 (in brief `the Act’) for a public purpose, namely ‘sewerage treatment plant, Snowdon’. Notification under Section 4 of the Act was issued on 22.12.2000. It was published in daily newspapers, official gazette and a convenient place on the spot on 7.1.2001, 23.12.2000 and 6.1.2001, respectively. Further notifications under Sections 6 and 7 were issued on 31.1.2001 and 20.5.2001, followed by notification under Section 9 of the Act on 17.4.2001. As no sale transaction is stated to have taken place in village Barmu, where the acquired land is situate, at the material time, market value of the land was assessed and settled taking into consideration yearly average price of land prevailing in the adjoining village Sharawag at the relevant time. Accordingly, compensation along with additional acquisition charges under Section 23 (1-A), solatium under Section 23 (2) and interest etc. was awarded at the following rates on the basis of classification of land:- Classification of land Rate per bigha Bakhal Aabal Rs. 5,17,000.00 Ghasni Darkhatiyan Rs. 93,500.00 Ghasni and Banjar Rs. 93,500.00 Housing and Shops Rs. 11,00,000.00 The claimants being dis-satisfied with the amount of compensation, applied to the Collector, Land Acquisition, for making reference to the Court under Section 18 of the Act. Accordingly the matter was referred to the learned reference Court(s) {Court of District Judge/District Judge (Forest) Shimla}. Both the Courts have come to the conclusion that in the absence of any reliable evidence brought on record on behalf of the parties, it 3 was safe to rely upon an earlier award dated 23.3.2000, ( Ex.P-6), passed by the learned Additional District Judge, Shimla, in land reference No. 6-7/4 of 1992, titled Satya Pal and another Versus State of H.P, relating to the acquisition proceedings in respect of a public purpose for laying water pipeline in mauza Surila - Burila, Tehsil and District Shimla, wherein, notification under Section 4 of the Act was issued on 16.9.1988, i.e more than 12 years prior in point of time. In that case, the Collector had assessed the market value of the acquired land @ Rs. 7,685-00 per bigha, which on reference was enhanced by the learned Additional District Judge to Rs. 58,890-00 per biswa, which ultimately was scaled down by this Court to Rs. 30,000-00 per biswa vide judgment dated 5.5.2004, in State of H.P and others Versus Satya Pal and others, latest HLJ, 2004 (H.P) 511. By taking into consideration the aforesaid sum of Rs.30,000-00 per biswa as market value of the acquired land at the relevant time, the reference Court(s) by giving allowance for the intervening period, fixed the market value of the acquired land at Rs.59,700/- per biswa, or Rs.11,94,000-00 per bigha i.e at the premium of 9% per annum on the basic price of Rs.30,000-00 per biswa, as fixed by this Court. Being aggrieved, the appellants, State of H.P and its functionaries have preferred the present appeals against the impugned awards dated 9.8.2005 and 12.12.2005. The challenge against the impugned awards is directed on behalf of the appellants mainly on the grounds that for want of any sale transaction in the area of acquisition, yearly average price of the land prevalent in the adjoining village Sharawag at the relevant time was rightly taken into consideration while fixing the 4 market value of the acquired land. The acquired land is situate in rural area, whereas that of mauza Surila--Burila is at a considerable distance, there being another chak i.e Banararu in between. To the contrary, the respondents have supported the impugned awards by placing reliance upon Bhim Singh and others Versus State of Haryana and another (2003) 10 Supreme Court Cases 529, State of H.P and others Versus Satya Pal and others (supra), Delhi Development Authority Versus Bali Ram Sharma and others AIR 2004 Supreme Court 4114 and Charan Dass (dead) by LRs. Vs Himachal Pradesh Housing and Urban Development Authority & Ors 2010 (1) Him.L.R. (SC) 145. In re Charan Dass (dead) by LRs, the Hon’ble Apex Court vide paras 10 to 12 has laid down the following broad principles to be kept in view while ascertaining the market value of the land for the purpose of determining the amount of compensation payable on acquisition of land for public purpose, which can be conveniently used as guidelines for disposal of these cases:- “10. Section 15 of the Act mandates that in determining the amount of compensation, the Collector shall be guided by the provisions contained in Sections 23 and 24 of the Act. Section 23 provides that in determining the amount of compensation to be awarded for the land acquired under the Act, the Court shall, inter alia, take into consideration the market value of the land at the date of the publication of the notification under Section 4 of the Act. The Section contains the list of positive factors and Section 24 has a list of negatives, vis-à-vis the land under acquisition, to be taken into consideration while determining the amount of compensation. As already noted, the first step being the determination of the market value of the land on the date 5 of publication of Notification under sub-Section (1) of Section 4 of the Act. One of the principles for determination of the market value of the acquired land would be the price that a willing purchaser would be willing to pay if it is sold in the open market at the time of issue of Notification under Section 4 of the Act. But finding direct evidence in this behalf is not an easy task and, therefore, the Court has to take recourse to other known methods for arriving at the market value of the land acquired. One of the preferred and well accepted methods adopted for ascertaining the market value of the land in acquisition cases is the sale transactions on or about the date of issue of Notification under Section 4 of the Act. But here again finding a transaction of sale on or a few days before the said Notification is not an easy exercise. In the absence of such evidence contemporaneous transactions in respect of the lands, which have similar advantages and disadvantages is considered as a good piece of evidence for determining the market value of the acquired land. It needs little emphasis that the contemporaneous transactions or the comparable sales have to be in respect of lands which are contiguous to the acquired land and are similar in nature and potentiality. Again, in the absence of sale deeds, the judgments and awards passed in respect of acquisition of lands, made in the same village and/or neighbouring villages can be accepted as valid piece of evidence and provide a sound basis to work out the market value of the land after suitable adjustments with regard to positive and negative factors enumerated in Sections 23 and 24 of the Act. Undoubtedly, an element of some guess work is involved in the entire exercise, yet the authority charged with the duty to award compensation is bound to make an estimate judged by an objective standard. 11. In Shaji Kuriakose & Anr. Vs. Indian Oil Corporation Ltd. & Ors. (2001) 7 SCC 650, this Court has observed as under: “It is no doubt true that courts adopt comparable sales method of valuation of land while fixing the market value of the acquired land. While fixing the 6 market value of the acquired land, comparable sales method of valuation is preferred than other methods of valuation of land such as capitalization of net income method or expert opinion method. Comparable sales method of valuation is preferred because it furnishes the evidence for determination of the market value of the acquired land at which a willing purchaser would pay for the acquired land if it had been sold in the open market at the time of issue of notification under Section 4 of the Act. However, comparable sales method of valuation of land for fixing the market value of the acquired land is not always conclusive. There are certain factors which are required to be fulfilled and on fulfillment of those factors the compensation can be awarded, according to the value of the land reflected in the sales. The factors laid down inter alia are (1) the sale must be a genuine transaction, (2) that the sale deed must have been executed at the time of proximate to the date of issue of notification under Section 4 of the Act, (3) that the land covered by the sale must be in the vicinity of the acquired land, (4) that the land covered by the sales must be similar to the acquired land and (5) that the size of plot of the land covered by the sale be comparable to the land acquired. If all these factors are satisfied, then there is no reason why the sale value of the land covered by the sales be not given for the acquired land. However, if there is dissimilarity in regard to locality, shape, site or nature of land between land covered by sales and land acquired, it is open to the court to proportionately reduce the compensation for acquired land than what is reflected in the sales depending upon the disadvantages attached with the acquired land”. 12. Yet again in Viluben Jhalegar Contractor (supra), making reference to a number of cases on the point, it was observed as follows: “18. One of the principles for determination of the amount of compensation for acquisition of land would 7 be the willingness of an informed buyer to offer the price therefor. It is beyond any cavil that the price of the land which a willing and informed buyer would offer would be different in the cases where the owner is in possession and enjoyment of the property and in the cases where he is not. 19. Market value is ordinarily the price the property may fetch in the open market if sold by a willing seller unaffected by the special needs of a particular purchase. Where definite material is not forthcoming either in the shape of sales of similar lands in the neighbourhood at or about the date of notification under Section 4(1) or otherwise, other sale instances as well as other evidences have to be considered. 20. The amount of compensation cannot be ascertained with mathematical accuracy. A comparable instance has to be identified having regard to the proximity from the angle as well as proximity from situation angle. For determining the market value of the land under acquisition, suitable adjustment has to be made having regard to various positive and negative factors vis-à-vis the land under acquisition by placing the two in juxtaposition. The positive and negative factors are as under: ---------------------------------------------------------------------------------- POSITIVE FACTORS NEGATIVE FACTORS i) smallness of size i) largeness of area ii) proximity to a road ii) situation in the interior at a distance from the road iii) frontage on a road iii) narrow strip of land with very small frontage compared to depth iv) nearness to developed iv) lower level requiring the area depressed portion to be filled up v) regular shape v) remoteness from developed locality vi) level vis-à-vis land under vi) some special acquisition disadvantageous factors which would deter a purchaser vii) special value for an owner of an adjoining property 8 to whom it may have some very special advantage.” Indisputably, no sale transaction in the village of acquisition was available at the given time. It was in such circumstances that the market value was assessed on the basis of yearly average price of land prevailing in the adjoining village Sharawag at the material time. While applying to the Collector for making reference to the court the main plea inter alia amongst others raised by the claimants was that the market value of the acquired land was wrongly fixed at Rs. 5,17,000-00 per bigha on the basis of yearly average price of land prevailing in village Sharawag and instead such rate prevailing at that time in the adjoining village Bhawana was Rs. 21,50,735-00 per bigha which ought to have been taken into account. At that time they had not placed any reliance on award Ex.P-6 of the learned Additional District Jude, Shimla, relating to an earlier acquisition dating back more than 12 years prior in point of time. This award was brought on record by the claimants while leading evidence in support of their claim for enhancement of compensation. In the peculiar facts and circumstances and on an over all view of the matter, I am satisfied that the claimants have travelled beyond the scope of their pleadings and the learned reference courts have also unwittingly fell into error by relying upon award Ex.P-6, passed by the Additional District Judge, in reference titled Staya Pal and another Versus State of H.P. which is absolutely unconnected with the acquisition proceedings under reference and that too dating back more than12 years in point of time. The reasons to arrive at this inference are enumerated hereinafter. 9 There is no denying the fact that no comparable sale transaction was available in respect of the area of acquisition i.e village Barmu at the relevant time. According to the Collector the adjoining village is Sharawag. However, according to the claimants, it is not village Sharawag, which adjoins the village Barmu where the acquired land is situate and instead village Bhawana is the adjoining village. However, a perusal of statements of two official witnesses examined on behalf of the claimants in the reference petition out of which RFA No. 38 has arisen, namely, PW-1 Shri Mehar Chand, Patwari and PW-2 Shri Jai Pal Chauhan, Patwari, would go to show that they have nowhere stated that village Bhawana adjoins village Barmu. It is only in the statement of PW-3 Shri Sham Lal, claimant, that village Barmu is stated to be adjoining village Bhawana and village Sharawag. Thus it is apparent that even according to the claimants village Sharawag adjoins village Barmu. It has already been noticed that in the absence of any comparable sale transaction in respect of village Barmu, at the relevant time, the market value of the acquired land was assessed by the Collector on the basis of the sale transaction in respect of village Sharawag. Here, it shall be pertinent to notice that RW-1 Shri Tek Chand, Assistant Engineer, who has been examined on behalf of the appellants has admitted in quite categorical terms that at the time of acquisition the market value prevailing in villages Bhawana and Sharawag was taken into consideration. However, later on the claimants were awarded compensation as per yearly average price of land prevailing in village Sharawag and not according to yearly average price of land prevailing in village Bhawana at that time. 10 A combined and harmonious reading of the evidence on record would go to show that whereas acquisition in the cases in hand was for sewerage treatment plant, the one involved in award Ex.P-6 was for laying of water pipeline. It goes without saying and is a matter of common knowledge that whereas water pipe line is laid under ground and can very well pass through inhabited areas such as villages, towns and cities, sewerage treatment plants are ordinarily located at secluded places. Further more a perusal of the award Ex.P-6 (page 5, para 8 and page 12, end of para 18) would go to show that though the land which was subject matter of acquisition in that case was stated to be at a walkable distance of five minutes from the road situate near Sanjauli, a suburb of capital town Shimla. To the contrary, as is evident from the oral evidence on record village Barmu where the acquired land is situate is at a considerable distance from the main road, albeit the fact that boundaries of the said village adjoin mauza Kelston of Shimla urban and the limits of Municipal Corporation, Shimla. PW-1 Shri Mehar Chand, Patwari has admitted during cross examination that the acquired land is at a lower level of 3-4 K.M below the road and is in the shape of ‘Dhank’ (precipice). Similarly, RW-2 Shri Jia Lal Chauhan, Patwari, has though denied that the acquired land is at a distance of 4-5 KM from the main road, Sanjauli, yet he has volunteered to state that it is at a distance of 2-2 ½ KM. He has further submitted that the acquired land is now connected by road. The road was not in existence at the time of acquisition. He has feigned ignorance that it was constructed for the treatment plant. He has also testified that though the boundaries of village Barmu converge with IGMC etc., yet are at a distance from the acquired land. 11 It emerges out of the above discussion that there was no comparable sale transaction in respect of village Barmu, where the acquired land is situate, at the relevant time. However, award of the Collector Ex.P-1 also does not show that either mauza Sharawag adjoins village Barmu or on what basis the market value of the acquired land was fixed and compensation paid to the claimants by taking into consideration the price of land prevailing in mauza Sharawag. On the other hand, the claimants have brought on record yearly average price of land Ex.P-3 relating to mauza Bhawana for the period 1.1.2000 to 31.12.2000 and that of mauza Sharawag Ex.P-4 for the period 23.12.1999 to 22.12.2000. In the former instance a small parcel of land measuring 0-17 biswas of the classification as ‘banjar ghashni’ was sold for Rs. 1,62,500-00, on the basis of which the following yearly average price of land prevailing in that village was calculated as under:- Classification of land Rate per bigha Kuhl Aabal Rs. 21,50,735-20 Kuhl Dome and Bakhal Abal Rs. 16,25,000.00 Bakhal Dome Rs. 10,67,401-90 Banjar and Ghasni Rs. 1,91,176.47 Similarly, a small piece of land was sold for Rs. 22,000/- as per yearly average price Ex.P-4 relating to mauza Sharawag, on the basis of which the yearly average price of different classes of land in that village comes as under:- Classification of land Rate per bigha Bakhal Aabal Rs. 5,17,000.00 Ghasni Darkhatiyan Rs. 93,500.00 Housing and Shops Rs. 11,00,000.00 12 Two settled principles of law can be conveniently adopted in these cases. These are that prices fetched by small plots of land cannot be safely taken into consideration on its face value while assessing market value of large extents and that in such circumstances, some deductions are bound to be made while fixing market value of large extents of acquired land vis-à-vis comparable sale transactions of small plots and that some discount is also liable to be given towards development of the acquired land so as to make the same fit for being put to use for the public purpose for which it is acquired. It is in evidence that village Barmu where the acquired land is situate adjoins both the villages Sharawag and Bhawana. The sale transaction in respect of village Sharawag was taken into consideration by the Collector, but not that of village Bhawana. Here the deposition of RW-1 Shri Tek Chand, Assistant Engineer, who is a witness for the appellants becomes relevant. As already noticed, he has admitted that at the time of acquisition market value of both the villages was taken into consideration, but, ultimately compensation was awarded on the basis of yearly average price of land prevailing in village Sharawag at the relevant time. There is no explanation as to why comparable sale transaction in respect of village Bhawana was not taken into consideration while assessing market value and making payment of compensation of the acquired land to the claimants. This aspect of the matter becomes further relevant as it has already been observed that there is no explanation to this effect in award Ext.P-1. The above discussion brings me to hold that the reference courts fell in error by relying upon award Ex.P-6 of Additional District Judge, Shimla, which bears no semblance to the 13 acquisition proceedings under reference and thus cannot be correlated to the judgment of this court in State of H.P and others Versus Satya Pal and another (supra) on which reliance has been placed on behalf of the claimants. For the same reason the authorities relied upon by the claimants reported as Bhim Singh and others Vs State of Haryana and another (supra) and Delhi Development Authority Vs Bali Ram Sharma and others (supra), do not go to advance their case. Now the question arises as to what was the market value of the acquired land at the relevant point of time. Apart from the principles of land noticed hereinabove another such principle is that when lands of different classifications are acquired for particular public purpose, such as, construction of roads, buildings, housing colonies, industrial establishments etc. the same loose their individual character/classification and are ordinarily liable to be assessed at the same rate irrespective of the classification of the individual extents of land. In the present cases though villages Sharawag and Bhawana adjoin village Barmu, where the acquired land is situate, yet the class wise highest yearly average price of land prevailing in each of these villages on or about the material time was Rs. 21,50,735.20 and Rs. 5,17,000-00, respectively and there is manifestly a lot of difference between the two. In such situation the most appropriate method to arrive at a common figure would be averaging method. By adopting this method, the figure that would be available is Rs. 13,33,867.60 (Rs. 21,50,735.20 plus Rs. 5,17,000-00= Rs.26,67,735.20 divided by 2 = Rs.13,33,867.60 rounded to Rs. 13,33,870.00). By taking into account the location of the acquired land and the purpose for which it has been put to use after acquisition and 14 the fact that comparable sale transactions available in both the villages of Sharawag and Bhawana were in respect of small pieces of land and the acquired land is a big chunk measuring 0-38-04 hectares, which is equal to about 5 bhighas approximately, discount to the extent of 30% can be safely and reasonably applied while determining the market value of the acquired land at the given time. Consequently, the figure that would be available is Rs.9.33.709.00 i.e Rs.13,33,870.00 less 30%. In view of the above, it is held that the market value of the acquired land at the material time was Rs. 9,33,709-00 and the claimants are entitled for compensation of the said land at this rate instead of @ Rs. 11,94,000-00 per bigha as held by the reference courts. Consequently, the appeals succeed partly and are accordingly allowed in part. The impugned awards, in so far as the same relate to fixation of market value of the acquired land shall stand modified accordingly. However, it is made clear that the respondents shall be entitled to all statutory benefits available under the Act on the amount of compensation as assessed herein.