THE HON’BLE SRI JUSTICE G. BHAVANI PRASAD AND THE HON’BLE SRI JUSTICE K.G. SHANKAR A.S.No. 2466 of 1998 Date: 20.01.2011 Between: Kanumuri Venkateswara Raju (died) per LRs i.e., appellants 2 to 5. .. Appellants/ Claimants AND The Mandal Revenue Officer, (LAO), Vijayawada Rural, Vijayawada. .. Respondent/ Referring Officer THE HON’BLE SRI JUSTICE G. BHAVANI PRASAD AND THE HON’BLE SRI JUSTICE K.G. SHANKAR A.S.No.2466 of 1998 JUDGMENT (per Hon’ble Sri Justice G. Bhavani Prasad): This appeal is directed against the Award, dated 06.02.1996 passed in O.P.No.93 of 1987 on the file of the Principal Sub- ordinate Judge’s Court, Vijayawada. 2. Ac.2.06 cents of land in R.S.No.20/6 of Ambapuram village, Vijayawada Rural was acquired for providing house sites under a notification under Section 4(1) of the Land Acquisition Act, 1894, published on 30.01.1982. The Land Acquisition Officer passed Award No.1 of 1986 on 20.03.1986 and awarded a compensation of Rs.11,300/- per acre. The solatium and additional market value were also granted and the claimant protested against the same, on which a reference was made to the Civil Court. 3. The claimant pleaded before the civil Court that the extent is actually Ac.2.12 cents and not Ac.2.06 cents, about which the claimant gave a specific notice to the Land Acquisition Officer much before the award. The claimant claimed that the acquired land abutting the main road and useful as house sites was compared with lands in R.S.Nos.13 to 15, which are far away and not with lands in R.S.Nos.2 and 4 which are adjacent. The comparison of sales was, therefore, faulty and the land is by the side of the road with an electricity line passing adjacent to the road. Hence, he claimed a compensation of Rs.1,00,000/- per acre. 4. The Land Acquisition Officer did not respond through any pleading before the reference Court and after examining PWs.1 & 2 and RW.1 and marking Exs.A.1 to A.5 and Exs.B.1 & B.2 during the enquiry, the reference Court considered the point of entitlement of the claimant to enhancement. It rendered the impugned award, firstly noting that the correct measurements of the acquired land as Ac.2.06 cents was certified by the Inspector of Survey and Land Records and not contradicted by any evidence for the claimants. While accepting the extent as claimed by the Land Acquisition Officer, the reference Court noted the claim of the acquired land being adjoining the main road, on which several buses were plying and street lighting was available. The Court also further noted that the very acquisition was for the purpose of providing house sites to the harijans and the location of the land was confirmed by the reference Court with reference to Exs.A.3 and B.2 sketches. The village was stated to be connected with Velagaleru-Vijayawada road by a connecting road and the reference Court, without going into the details, accepted the rejection of the sales statistics by the Land Acquisition Officer in respect of a number of items and due to the admitted absence of any houses in R.S.Nos.19 and 20, the reference Court also did not accept the potentiality of the land for use as house sites. The reference Court discarded Exs.A.4 and A.5 as covering small extents of land and the presence of reserved forest on one side and water tank on the other side of the acquired land was considered to be negativing for any scope for further development of the acquired land. The reference Court also did not consider the land to be of such a low value as decided by the reference Officer and abruptly came to a conclusion about the justification for enhancing the market value to Rs.20,000/- per acre. The reference Court deducted 1/3rd of the extent towards the development and granted compensation at Rs.20,000/- per acre only in respect of the remaining land and also granted solatium at 30%, additional market value at 12% and interest at 9% per annum for the first year and 15% per annum thereafter. 5. Aggrieved by the same, the sole claimant is, before this court with this appeal with appellants 2 to 5 being brought on record subsequently due to the death of the sole appellant. The claim of the appellants is that the value disclosed by Exs.A.4 and A.5 registered sale deeds reflecting the correct market value ought to have been adopted straight away, more so, in the light of the documents being executed much earlier to Section 4 (1) notification. The potentiality of the fastly developing area ought to have been considered positively and the land ought to have been valued at Rs.1,00,000/- per acre from which 1/3rd should have been deducted towards developmental activities granting the balance of compensation at Rs.67,000/- per acre to the claimants. 6. Sri V.S.R. Anjaneyulu, learned counsel appearing on behalf of the appellants and Sri S.Md. Haneef, learned Assistant Government Pleader for Appeals appearing on behalf of the State are heard. 7. The point for consideration is what was the probable market value of the acquired land by the time of the notification under Section 4 (1) of the Land Acquisition Act. 8. The evidence of Head Assistant in the office of the Mandal Revenue Officer/the Referring Officer as RW.1 itself is that the eastern boundary of the acquired land is Panchayat Road and there are houses in R.S.No.22 even by the time of acquisition on the other side of the road. RW.1 also admitted that the lands in R.S.Nos.2, 4, 20 and 22 are side by side and are comparable, whereas the lands in R.S.Nos.13, 15, 16 and 20 under wet cultivation are not comparable with dry lands fit for house sites. He was also unaware as to whether the lands to the side of Yellappa Cheruvu under wet cultivation were liable for submersion in Budameru floods and the lands in R.S.Nos.2, 4, 20 and 22 are at a higher level and not liable for such submersion. RW.1, while speaking about the process of acquisition, did not elaborate on any other details except the alleged comparability between the lands acquired and the lands sold under Item No.6/81. Though he promised to examine the vendor and vendee concerned with item No.6/81 sale, no person connected with the said sale transaction was examined on behalf of the referring officer. From this evidence of RW.1 itself, it is, thus, clear that notwithstanding the absence of any personal knowledge about these lands as admitted by him, still the location of the acquired land by the side of Panchayat Road and the difference in value and utility of the lands at different levels is clear. The only attempt by him to distinguish the transactions under 2/81 and 4/81 of the award is that they are smaller extents and even he did not claim the documents to be containing any inflated valuation. While document No.2/81 sale deed referred to in the award is disclosing a rate of Rs.1,00,000/- per acre, document No.4/81, disclosed a rate of Rs.1,33,333/- per acre. The transactions were much prior to Section 4 (1) notification and could not have been connected with any ulterior motives for getting higher compensation. 9. The Village Karnam of Ambapuram was examined as PW.2 and his service for more than 50 years by the time of his deposition in that capacity provides a type of respectability to his claims by the very duty he performed as a village karnam. He was not alleged to be having any interest or motive in the claim as sufficient to discredit him as resorting to falsehood and PW.2 was clear that the main road from Vijayawada to Velagaleru and Panchayat Road from Ambapuram village were connected and that the Panchayat Road had city buses plying and street lighting functioning since several years. The land of the claimant was stated by him to be highest in level and not liable for submersion in Budameru floods in comparison with the lands, the transactions concerning which were the basis for the valuation by the Land Acquisition Officer. PW.2 stated that the acquired land is very costly when compared with the said agricultural lands and he also stated that Yellappa Cheruvu and Gollapudi Mustabad Irrigation Channel intervene between the higher level and low level lands. The evidence of PW.2 coupled with the admissions of RW.1 provides sufficient force to the claims of the deceased-claimant as PW.1 and PW.2, who was also the scribe of Exs.A.4 and A.5, denied the documents being executed for higher amounts. Execution of such sale deeds for lower amounts may be in tune with the broad human probabilities due to the tendency to avoid higher stamp duty, but inflating the consideration should be considered an exception and should be shown to be for specified reasons. No such reason could be conceived in respect of Exs.A.4 and A.5 on the material on record. 10. The deceased claimant as PW.1 claimed that Ex.A.4 at a rate of Rs.1,00,000/- per acre and Ex.A.5 at a rate of Rs.1,95,000/- per acre should be the basis for granting compensation to him. He claimed that he was raising vegetables in the dry land before acquisition, which land is actually at a distance of 200 metres from the road leading to Ambapuram on which there was plying of city buses and street lighting. 11. Even assuming that the claims of PW.1 about Exs.A.4 and A.5 are tainted with interestedness and not open to acceptance at face value, the transactions at 2/81 and 4/81 referred to by the Land Acquisition Officer in his award were not stated to be vitiated by any other reason in the award, except that they were in respect of very small extents or small bits. In fact, the award does not state any of the sales data to be vitiated by any other reasons, except the distance or classification or extent. Therefore, the fixation of market value by the Land Acquisition Officer at Rs.11,300/- per acre is obviously low and against the information in the data collected by the Land Acquisition Officer for passing the award and the finding of the reference Court that the value fixed by the referring officer was too low had become final in the absence of any challenge. 12. While saying so, the reference Court did not appear to have adopted any intelligible criteria for arriving at the market value at Rs.20,000/- per acre. If item Nos.2/81 and 4/81 in the award and Exs.A.4 and A.5 disclosed the transactions to be at a rate of Rs.1,00,000/- to Rs.1,95,000/- per acre during the relevant period, even if they were for small extents, they could have been taken as a safe guide for arriving at the real market value of a larger extent. Notwithstanding that those transactions might be relating to house sites and the acquired land was an agricultural land, the comparability could have been connected to the potentiality of the acquired land for conversion into house sites and the benefit could have been given to the claimants to that extent. The description of the properties covered by Exs.A.4 and A.5 shows that the house sites were located in residential localities and the sales under Ex.A.4 also covered a thatched residence existing the property by that time. Therefore, the value of the already developed house sites in residential localities would undoubtedly be much more than the land still under agriculture by the time of acquisition. 13. Further, even in respect of such transactions, Sri V.S.R. Anjaneyulu, learned counsel for the appellant rightly referred to the applicability of the principles laid down by the Apex Court in A Natesam Pillai v. Spl. Tahsildar, LA, Tiruchy[1], wherein also the question was about the comparability of sales of small extents wherein the Apex Court had made appropriate reductions on such fact. The Apex Court pointed out the need to ignore any post notification transactions while even a comparable sales transaction of a very small area of land prior to the notification could be applicable to the acquisition of a large tract of land if the necessary and required reduction in value is given. The Apex Court was referring to the need for the deductions in respect of formation of roads, provision of civil amenities, expenses for development, interest on the outlays for the period of deferment of the realization of the price, the profits on the venture etc. and the building potentiality of the acquired land was a factor which must be taken into consideration, while determining the compensation according to the Supreme Court. The use to which the acquired land is reasonably capable of being put in the immediate or near future, indicating its potentiality, was directed to be given due consideration. The location of the land at a place in and around which building activity has already started was taken into account. The land in that case was abutting the main road surrounded by schools, Panchayat Union Office, Shops etc., and notwithstanding the comparable sale of a small extent, the Supreme Court upheld the fixation of the valuation with reference to the earlier decisions of the Apex Court. 14. Adopting the standards set by the Supreme Court to the present case, it is clear that the four transactions above referred to concerning house sites at about the relevant time cannot be totally brushed aside in respect of those lands by the side of the Panchayat Road with electricity connection and availability of transport to Vijayawada city and having every potential to be used as house sites at the relevant time. In fact, it is due to suitability for use as house sites that the acquisition was made by the Government for providing such house sites to harijans and the value between Rs.1,00,000/- and Rs.1,95,000/- under the four transactions was stated even by the claimant to be indicating the potential value of the land to be Rs.1,00,000/- per annum. That was what he claimed as PW.1 also and the need for deduction towards development charges and other considerations was part of the grounds of appeal itself, apart from the binding principles in this regard laid down by the Apex Court. Considering that 1/3rd or 40% of the probable value is normally deducted towards such contingencies and that this land would further require levelling, approval of the lay out and other incidental activities before conversion into house sites and even then will not have the same real market value as already developed localities, the fixation of the probable market value at the relevant time at about 40% of the value indicated by the four transactions and the claim of PW.1 will be answering the need for granting a just and proper compensation. 15. The reasoning of the reference Court in fixing the value at Rs.20,000/- per acre being supported by no reasoning, such enhancement has to be granted on the material on record. The claimants will be entitled to the consequential statutory benefits also like on the original compensation awarded by the reference Court. 16. Accordingly, the claimants are entitled to compensation in respect of Ac.2.06 cents of land at Rs.40,000/- per acre along with solatium at 30% thereon and 12% per annum additional market value from the date of notification till the date of passing of the award and interest on the compensation including the solatium and additional market value at 9% per annum from the date of taking possession for one year and thereafter at 15% per annum till payment of the compensation. 17. The appeal is allowed accordingly in part without costs. ________________ G. Bhavani Prasad, J ________________ K.G. Shankar, J Date: 20.01.2011 Isn [1] 2011(1) ALD 34 (SC)