IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. REGULAR FIRST APPEAL No. 476 of 2004 DATE OF DECISION : SEPTEMBER 03 , 2008 ANOOP KUMAR AND OTHERS ..... APPELLANT(S) VERSUS STATE OF HARYANA AND OTHERS .......RESPONDENT(S) CORAM : HON'BLE MR. JUSTICE AJAI LAMBA PRESENT: Shri ML Sarin, Sr. Advocate, with Mr. Hemant Sarin, Advocate, for the claimants. S/Shri Anil Khetrapal & Adarsh Jain, Advocates. Mr. HS Hooda, AG, Haryana, with Mr. Narender Sura, AAG, Haryana, for the State. Mr. Ravinder Jain, Advocate, for the HUDA. AJAI LAMBA, J. This is a bunch of 22 Regular First Appeals requiring the Court to assess the market value of land falling in Revenue Estate of Village Jagadhari, District Yamuna Nagar, as on 4.6.1997 i.e. the date of publication of the notification under Section 4 of the Land Acquisition Act, 1894 (for short 'the Act'). While the claimants have come up in appeal claiming enhancement of compensation in Regular First Appeal Nos. 476 to 478 of 2004, 1201, 1233 to 1235 and 1238, of 2005, the State of Haryana and Haryana Urban Development Authority (for short 'HUDA') have filed REGULAR FIRST APPEAL No. 476 of 2004 2 Regular First Appeal Nos.432 to 434, of 2004 and 836 to 845 of 2005, praying for reduction in the compensation awarded by the reference court. For facts, First Appeal No. 476 of 2004 (Anoop Kumar etc. v. State of Haryana and others) is being taken up. A brief history leading to the acquisition proceedings for which market value is required to be assessed, is required to be given. On 20.8.1980 (Exhibit P8), a notification under Section 4 of the Act, for acquisition of 700 acres of land falling in Revenue Estates of Villages Jagadhri, Garhi Mundon, Gobindpura, Tejli and Gobindpuri, was issued. The public purpose for which the acquisition was proposed was for development of land for residential and commercial purposes, by HUDA. The land of the claimants' herein was also notified for acquisition. Notification/declaration under Section 6 of the Act was published on 13.7.1982 (Exhibit P9). The land of the claimants, however, was released. On the remaining land, Sector 17, Jagadhri, has been developed. With regard to the land of the claimants, fresh acquisition proceedings were initiated through publication of notification under section 4 of the Act, on 4.6.1997. The land of the claimants falls in Revenue Estate of Village Jagadhri and the area proposed to be acquired is 4.21 acres. The notification under Section 4 of the Act also proposed acquisition of land measuring 2.60 acres falling in the Revenue Estate of Village Garhi Mundon. The public purpose for acquisition is for the development and utilization of land as residential, commercial and industrial area for Sectors 17 and 18, Jagadhri The declaration under Section 6 of the Act was issued on REGULAR FIRST APPEAL No. 476 of 2004 3 2.6.1998. The acquisition of land falling in the Revenue Estate of Village Garhi Mundon was challenged by way of filing of a writ petition. The acquisition proceedings were stayed. It is under these circumstances that the market value of the land falling in the Revenue Estate of Village Jagadhri only i.e. 4.21 acres, is required to be assessed. The Land Acquisition Collector pronounced the award on 1.6.2000 with regard to the land falling in the Revenue Estate of Village Jagadhri at the rate of Rs.6 lacs per acre. The claimants, not being satisfied, made a reference under Section 18 of the Act, while claiming Rs.9,500/- per square meter. The claim was also made with regard to tubewells, etc. The learned counsel for the appellants have addressed arguments in these appeals only qua valuation of land. The issue with regard to valuation of tubewells, etc. has not been raised and, thus, the Court is required to assess only the market value of the land. The reference court vide the impugned award dated 18.11.2003 enhanced the compensation to the rate of Rs.750/- per square meter. The first contention of the learned counsel for the claimants is that the land has been within the municipal limits of Jagadhri since the year 1961. 36 years have gone-bye since the time of the inclusion of the land within the municipal limits, the land has been substantially improved and has a very high potential for being developed as residential, commercial and industrial area. It has further been contended by the learned counsel for the claimants that Sector 17, Jagadhri had already been developed. Sector 17, Jagadhri contains residential and commercial REGULAR FIRST APPEAL No. 476 of 2004 4 area. The land in close vicinity had been auctioned by HUDA in between years 1990-1997. Reliance has been placed on Exhibits P-15 to P-54, which are sale instances of land by way of auction. Land had fetched between Rs.4801/- to Rs.10,890/- per square meter. The contention is that the average of the said market value is required to be taken into consideration to assess the market value of the land acquired under present acquisition proceedings. No cut thereon is required to be given in view of the fact that roads, sewerage, electricity connections, etc. i.e. the entire infrastructure, is already available. A reference to site plans, Exhibits P-2 and P-6, has been made to say that the land is surrounded by developed area of Sector 17, Jagadhri. The land is located on existing link road. The further argument of the learned counsel for the claimants is that the land is of purely commercial nature as is made out from Exhibit P-6. The Draftsman-Chander Pal has appeared as PW-2 and has stated that the land of the claimants was earmarked as commercial plots in the year 1991 itself. The land has been shown as covered under Shop-cum- Office Nos.146, 147, 167 and 168 and Booths bearing Nos.148 to 166. It, thus, transpires that the acquired land out of which the above numbered commercial sites were scheduled to be carved out in the year 1991, would carry the same value as the adjoining land that was sold by way of Exhibits P-15 to P-54. Under the circumstances, no cut would be justified. In this regard, reference has been made to Shri Lakhmi Dass and others v. The Punjab State and others, 1977 P.L.J. 464, P. Ram Reddy etc. v. Land Acquisition Officer, Hyderabad Urban Development Authority, REGULAR FIRST APPEAL No. 476 of 2004 5 Hyderabad etc., 1995 All India Land Acquisition and Compensation Cases 184 and Nelson Fernandes and others v. Special Land Acquisition Officer, South Goa and others, JT 2007(8) Supreme Court 285. The second argument of the learned counsel for the claimants is that Exhibit P-1 is a document that indicates transfer of land in favour of Power Grid Corporation. 8000 square meters land had been sold by HUDA to the Corporation on 23.7.1996 at the rate of Rs.1,560/- (approximately) per square meter, which was only for residential purposes. The land of the claimants, having commercial potential and being surrounded by commercial plots, has to be evaluated at a higher rate. More so, the margin for increase in the market value for one year is required to be given as the acquisition in question relates to year 1997. Exhibit P-1, therefore, denotes the market value of the land as accepted by the State The argument of the learned counsel for the claimants further is that appellant-Anoop Kumar had sold 4 marlas (101 square yards) plot on 11.10.1993 to Ashok Kumar Thukral vide sale deed, Exhibit P-103, at the rate of Rs.1,450/- per square yard. The area has, now, been acquired and forms part of the acquired land and, therefore, denotes the correct and true market value. In this regard, a reference has been made to The Dollar Company, Madras v. Collector of Madras, AIR 1975 Supreme Court 1670 and Special Deputy Controller and another etc. v. Kurra Sambasiva Rao and others, etc., AIR 1997 Supreme Court 2625. On this sale instance, increase at the rate of 12% per annum is required to be considered for the period elapsed in between years 1993 and 1997. In support of the same REGULAR FIRST APPEAL No. 476 of 2004 6 argument, learned counsel has contended that after giving margin for increase in the market value, the market value of the land should be assessed as per the average of market value of Exhibits P-1 and P-103. As against the above, the learned counsel for the State has argued that the land sold in auction is after providing various amenities i.e. roads, sewerage, green belt, etc. Thus, the price received by the State by way of auction of small plots cannot per-se be considered as the market value of the land and cut of 50% has to be made. There is, thus, no error in calculation. The other argument raised by the learned counsel for the State is that market value of the land acquired for Sector 17, Jagadhri in the year 1980 had been assessed by this Court vide judgment, Exhibit R-6, while dealing with RFA 2556 of 1997 decided on 6.4.1989, at the rate of Rs.96,000/- per acre. The land of the claimants is required to be assessed accordingly. Learned counsel for the State has also contended that the evidence brought on record does not indicate any rise in the market value. It has also been argued that Exhibit P-103 cannot be made the basis to assess the market value in so much as the purchaser-Ashok Kumar Thukral is also an appellant. The sale deed, therefore, cannot be relied upon. No other contention has been raised nor reference has been made to any other document. I have heard the learned counsel for the parties and have gone through the record with their assistance. REGULAR FIRST APPEAL No. 476 of 2004 7 The reference court has taken into account Exhibits P-1 and P-103 to determine the market value. The average of the two sale instances has been taken at Rs.1,500/- per square meter and a cut of 50% has been employed to determine the market value at the rate of Rs.750/- per square meter. Before considering the mode of assessment of market value, the material on which reliance has been placed, is required to be seen. A perusal of Exhibit P-1 shows that it is a sale deed executed on 10.6.1997. The Vendor-HUDA through Estate Officer, HUDA, Jagadhri, District Yamuna Nagar, sold land measuring 8000 square meters to the Power Grid Corporation of India Limited for a sum of Rs.1,25,13,173 i.e. at the rate of Rs.1,560/- per square meter, approximately. It has been mentioned in the document itself that the vendor i.e. HUDA, had sanctioned the sale of the land to the transferee in pursuance of allotment letter dated 23.7.1996 under sub-regulation (1) of Regulation (5) of the Haryana (Disposal of Land and Buildings) Regulation, 1978. It has been clarified that the land was to be used for residential purposes in Urban Estate area of Jagadhri. Exhibits P-15 to P-54 are allotment letters issued by the Estate Officer, HUDA, in favour of various persons for different plots of different dimensions. The dimensions of plots vary from 22.68 square meters to 126.06 square meters. All the plots were allotted to the successful auction purchasers. On a perusal of the documents/allotment letters, it is reflected that the small size plots had been sold at a substantially higher price as compared to the bigger size plots. REGULAR FIRST APPEAL No. 476 of 2004 8 Exhibit P-103 is a sale deed in regard to a plot measuring 4 marlas (101 square yards) sold by appellant-Anoop Kumar on 11.10.1993 to Ashok Kumar Thukral at the rate of Rs.1,450/- per square yard. I shall deal with the judgments referred to by the learned counsel for the claimants. Learned counsel for the claimants has referred to the judgments of the Hon'ble Supreme Court of India in the cases of Dollar Company (supra) and Kurra Sambasiva Rao (supra), to contend that the best sale instance to be relied upon so as to determine the market value would be a sale instance out of the acquired land in which the claimant himself is a party. In the case of Dollar Company (supra), the Hon'ble Supreme Court of India, in para-5 (relevant portion), has held in the following terms:- “5. It is true that compensation for compulsory acquisition, as governed by Section 23, gives high priority to the market value of the land at the date of the publication of the notification under S. 4, sub-s. (1). But what is market value? It is a common place of this branch of jurisprudence that the main criterion is what a willing purchaser would pay a willing vendor. Ordinarily a party will be entitled to get the amount that he actually and willingly paid for a particular property, provided the transaction be bona fide and entered into with due regard to the prevalent market conditions and is proximate in time to the relevant date under S. 23. We may even say that the best evidence of the value of property is the sale of the very property to which the claimant is a party. If the sale is of recent date, then all that need normally be proved is that the sale was between a willing purchaser and a REGULAR FIRST APPEAL No. 476 of 2004 9 willing seller, that there has not been any appreciable rise or fall since and that nothing has been done on the land during the short interval to raise its value (See Parks 'Principles & Practice of Valuations' P.29 – Eastern Law house, Calcutta – IV Edition, 1970). But if the sale was long ago, may be the Court, would examine more recent sales of comparable lands as throwing better light on current land value. ........” In Kurra Sambasiva Rao's case (supra), the Hon'ble Supreme Court of India, in para-8 (relevant portion), has held in the following terms:- “8. The best evidence of the value of property are the sale transaction in respect of the acquired land to which the claimant himself is a party; the time at which the property comes to be sold; nature of the consideration and the manner in which the transaction came to be brought out. They are all relevant factors. In the absence of such a sale deed relating to the acquired land, the sale transactions relating to the neighbouring lands in the vicinity of the acquired land. In that case, the features required to be present are; it must be within a reasonable time of the date of the notification; it must be a bonafide transaction; it should be a sale of land similar to the land acquired or land adjacent to the land acquired; and it should possess similar advantageous features. These are relevant features to be taken into consideration to prove the market value of the acquired land as on the date of the notification published under Section 4(1) of the Act. ......” In the context of the argument that adjoining land had been sold under sale instances, Exhibits P-15 to P-54, as is made out from site plan, Exhibit P-6, reference has been made to a Division Bench judgment REGULAR FIRST APPEAL No. 476 of 2004 10 of this Court in Shri Lakhmi Dass (supra), wherein in para-13, it has been held as under:- “13. For the aforesaid reasons, I am of the view that the classification of the acquired land according to the old revenue records and the determination of its valuation on that basis by the Court below is unwarranted in the present case. The land here had patent potentialities for being put to residential, commercial or industrial uses, and, as noticed earlier, was already within the urban area of the town of Ludhiana. It had therefore, to be assessed as such and not on the basis of its agricultural qualities. I would, accordingly set aside the classification aforesaid and the valuation based thereon. The whole of the land under acquisition, therefore, would have to be evaluated at a uniform rate primarily on the ground of its potentiality for urban development.” On the same issue, reference has been made to the judgment in P. Ram Reddy's case (supra), in which the Hon'ble Supreme Court of India has dealt with the issue in the following manner (in paras 12, 13 and 14):- “12. Then, comes the question of determining the market value of the acquired land with building potentiality. Undoubtedly such market value of the acquired land with building potentiality comprises of the market value of the land having regard to the use to which it was put on the relevant date envisaged under Section 4(1) of the LA Act plus the increase in that market value because of the possibility of the acquired land being used for putting up buildings, in the immediate or near future. If there is any other land with building potentiality similar to the acquired land which had been sold for a price obtained by a willing seller from a willing purchaser, such price could be taken to REGULAR FIRST APPEAL No. 476 of 2004 11 be the market value of the acquired land, in that, it would have comprised of the market value of the land as was being actually used plus increase in price attributable to its building potentiality. If the prices fetched by sale of similar land with building potentiality in the neighbourhood or vicinity of the acquired lands with building potentiality, as on the relevant date envisaged under Section 4(1) of the LA Act, are unavailable, it becomes necessary to find out whether any building plots laid out in a land similar to the acquired land had been sold by a willing seller to a willing buyer on or near about the relevant date under Section 4(1) when the acquired land had been proposed for acquisition and then to find out what would be the price which the acquired land would have fetched if had been sold by making it into building plots similar to those sold. In other words, an hypothetical lay-out of building plots in the acquired land similar to that of the layout of building plots actually made in the other similar land, has to be prepared, and the price fetched by sale of building plots in the lay-out actually made should form the basis for fixing the total price of the acquired land with building potentiality, to be got if plots similar to other plots had been made in the latter land and sold by taking into account plus factors and minus factors involved in the process. 13. .................. Thus, when it becomes inevitable for the Court to fix the market value of the the acquired land with building potentiality on the basis of the price fetched by sale of a building plot in a developed layout of building plots in the vicinity, it must, in our view, fix the wholesale market value of the acquired land with building potentiality at one- third to one-half of the retail price got by genuine sales of plots in a developed layout in the vicinity, by deducting two- thirds to one half out of the retail prices of plots, as losses or expenses involved in having made the land where the plots REGULAR FIRST APPEAL No. 476 of 2004 12 are formed as developed, according to the degree of development. For instance, if the retail price of plot is Rs.12/- per square yard, the wholesale price of the acquired land with building potentiality could be fixed at rupees varying between Rs.4/- and Rs.6/- depending upon the nature of development found in the layout of the plot sold in retail. Coming to fixation of the wholesale price of the acquired land with building potentiality on the basis of retail price of a building plot sold out of an undeveloped layout of building plots, such wholesale price ought to be fixed by deducting at least one-third of the retail price of the building plot in such layout, because such would be the least loss to be suffered in forming a layout of building plots in the acquired land with building potentiality, after leaving out land for roads, drains etc. by obtaining the needed permissions from public authorities for making such layout. Therefore, the wholesale price of the acquired land could be fixed at Rs.8/- per square yard if the price fetched or to be fetched by sale of building plot in an undeveloped layout is Rs. 12/-. However, in either of the said cases whether it be the determination of the market value of the acquired land with building potentiality with reference to the price fetched by sale of plots in a well developed layout in the neighbourhood or whether it be the determination of the market value of the acquired land with building potentiality with reference to the price fetched by sale of building plots in an undeveloped layout of building plots in the neighbourhood, it becomes inevitable for the Court to find out what will be the price fetched or to be fetched by the sales of plots in the layouts, relied upon by any of the parties with reference to the price which the plots could have fetched if sold on the date of the publication of the preliminary notification under Section 4(1) of the Act. Further, where no evidence of price fetched by the sales of REGULAR FIRST APPEAL No. 476 of 2004 13 the plots in layouts of building plots in the neighbourhood of the acquired lands becomes available, then what could be done is to find out the market value of the acquired land with reference to the relevant date of publication under Section 4(1) of the LA Act, according to the actual use to which it was put and increase its value by a small percentage having regard to the degree of its building potentiality ascertained on the basis of evidence to be made available in that regard. A small percentage increase to be given shall not exceed 1/5th of the market value of the land found out according to its actual user since resort to the method of giving increased value for such building potentiality arises only when there is no evidence of sales of building plots in the neighbourhood of the acquired land indicating that there was no immediate demand, as such, for building plots even if formed in the acquired land. 14. Hence, whether the acquired land has building potentiality or not, while has to be decided upon reference to the material to be placed on record or made available by the parties concerned, the market value of the acquired land with building potentiality, is also required to be determined with reference to the material to be placed on record or made available in that regard by the parties concerned and not solely on surmises, conjectures or pure guess.” In the same context, a reference has been made to the case of Nelson Fernandes (supra), wherein the Hon'ble Supreme Court of India (in para-30), the following has been held:- “30. We are not, however, oblivious of the fact that normally 1/3 deduction of further amount of compensation has been directed in some cases. However, the purpose for which the land acquired must also be taken into consideration. In the instant case, the land was acquired for the construction of REGULAR FIRST APPEAL No. 476 of 2004 14 new BG line for the Konkan Railways. This Court in Hasanali Khanbhai & Sons & Ors. v. State of Gujarat, 1995 (2) SCC 422 and L.A.O. v. Nookala Rajamallu, 2003 (10) Scale 307, had noticed that where lands are acquired for specific purposes deduction by way of development charges is permissible. In the instant case, acquisition is for laying a railway line. Therefore, the question of development thereof would not arise. Therefore, the order passed by the High Court is liable to be set aside and in view of the availability of basic civic amenities