IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Civil Writ Petition No.20433 of 2009 Date of decision: 17.08.2010 Mala …..Petitioner versus The State of Punjab and others ……Respondents CORAM: Hon’ble Mr.Justice Jasbir Singh Hon’ble Mr.Justice Augustine George Masih Present: Mr.Arun Bansal, Advocate with Mr.Sandeep Bansal, Advocate Mr.R.S.Rai, Senior Advocate with Mr.S.S.Tiwana, Advocate Mr.H.K.Aurora, Advocate Mr.Rajeev Anand, advocate Mr.Surinder Kapoor, Addl.A. G. Punjab Jasbir Singh, J. This order will dispose of under mentioned 40 writ petitions, as common question of law and facts are involved in these cases. To dictate order, facts are being taken from CWP No.20433 of 2009. Writ petitions filed by the land owners 1. CWP No.20433 of 2009 2. CWP No. 154 of 2010 3. CWP No.3443 of 2010 4. CWP No. 20329 of 2009 5. CWP No. 20318 of 2009 6. CWP No. 20333 of 2009 7. CWP No. 20431 of 2009 8. CWP No. 20330 of 2009 9. CWP No. 1163 of 2010 Civil Writ Petition No.20433 of 2009 10. CWP No. 2323 of 2010 11. CWP No. 2326 of 2010 12. CWP No. 20319 of 2009 13. CWP No. 20320 of 2009 14. CWP No. 20321 of 2009 Writ petitions filed by the Improvement Trust 1. CWP No. 5952 of 2010 2. CWP No. 5953 of 2010 3. CWP No. 5954 of 2010 4. CWP No. 5955 of 2010 5. CWP No. 6287 of 2010 6. CWP No. 6488 of 2010 7. CWP No. 6490 of 2010 8. CWP No. 6491 of 2010 9. CWP No. 6521 of 2010 10. CWP No. 6570 of 2010 11. CWP No. 6802 of 2010 12. CWP No. 6803 of 2010 13. CWP No. 6804 of 2010 14. CWP No. 6805 of 2010 15. CWP No. 6806 of 2010 16. CWP No. 6807 of 2010 17. CWP No. 6808 of 2010 18. CWP No. 7187 of 2010 19. CWP No. 7188 of 2010 20. CWP No. 7242 of 2010 21. CWP No. 14431 of 2010 22. CWP No. 14432 of 2010 23. CWP No. 14433 of 2010 24. CWP No. 14434 of 2010 25. CWP No. 14435 of 2010 26. CWP No. 14436 of 2010 The petitioner is a land owner, whose land was acquired by the respondents for development of Scheme No.2, which was prepared by respondent No.3. Award passed by the Land Acquisition Collector 2 Civil Writ Petition No.20433 of 2009 (respondent No.2) on 11.7.1997 (P1) and order passed by the President, Land Acquisition Tribunal, Improvement Trust at Hoshiarpur (in short, the Tribunal) dated 17.4.2003 (P3) are under challenge on a ground that the amount of compensation awarded is deficient and is not as per the market value of the land when it was acquired. Brief Facts The Hoshiarpur Improvement Trust (respondent No.3) prepared a development Scheme No.2 in an area measuring 291 Kanal 7 marla situated in villages Purhiran and Sutehri situated within the municipal limits of Hoshiarpur city. Out of above said land, 230 kanals 9 marla was the ownership of the Municipal Committee, Hoshiarpur, which was taken over by respondent No.2 through negotiation. To acquire rest of the land measuring 59 kanals 3 marla, the process was completed as per the provisions of Punjab Improvement Trust Act, 1922 (in short, the Act). It is necessary to mention here that on objection raised, respondent No.1 exempted land measuring 1 kanal 15 marla from acquisition by invoking the provisions of Section 56 of the Act. It is also relevant to note here that notification under Section 36 of the Act, to acquire this land was issued on 29.7.1994. After completing all formalities of hearing objections etc., notification under Section 41 of the Act was issued on 10/14.7.1995. Respondent No.2 passed an award on 11.7.1997, awarding compensation for the land under acquisition, structures raised thereon and for the standing trees. To determine the compensation, for the land under acquisition, respondent No.2 placed reliance upon the approved Collector’s rates and granted ` 1.07 lacs per acre for Chahi (`668.75 per marla), ` 1.10 lacs per acre for the remaining all kinds of land (` 687.50 per marla) for village Purhiran and @ ` 1.50 lacs per acres for all kinds of land 3 Civil Writ Petition No.20433 of 2009 (` 714.30 per marla) in village Sutehri. Respondent No.2 also assessed ` 46,61,760/- for 52 structures / buildings standing at the spot. ` 70,300/- were assessed towards cost of tube-wells. ` 30,069/- were assessed towards fruit bearing trees and ` 37,824.54 Paisa were assessed towards compensation of rest of trees existing at the spot. The land owners were not satisfied with the compensation awarded. They went to the Tribunal with a prayer for enhancement of compensation. Before the Tribunal, the land owners produced 31 witnesses and also brought on record various documents to support their case. To rebut their claim, respondent No.2 produced 5 witnesses and also brought on record documentary evidence. The Tribunal, after taking note of evidence led by the parties, came to a conclusion that it was a case in which compensation deserves to be enhanced. Reference was made to 17 sale instances brought on record by the land owners to arrive at that conclusion. However, thereafter, without any further discussion and making reference to those sale deeds, the claim was accepted and the compensation was enhanced in the following manner:- Name of village Kind of land Rates awarded by the Collector per marla Enhanced market rates assessed by the Court per marla Purhira n Chahi Rs.668.75 Rs.1337.50 Remaining all kind of land Rs.687.50 Rs.1375.00 Sutehri All kind of land Rs.714.30 Rs.1428.60 The land owners were also held entitled to all statutory benefits available to them as per the provisions of the Land Acquisition Act, 1894 (in short, the Land Acquisition Act). Hence, this writ petition. 4 Civil Writ Petition No.20433 of 2009 Counsel for the claimants, by making reference to the sale instances brought on record, argued that the Tribunal has erred in not relying upon those instances for granting higher compensation to them. To say that the land has a potential value, reference was made to the evidence on record, suggesting that the land falls within the municipal limits, situated in between the two roads, already 56 structures were in existence in the area under acquisition and fruit trees and other trees were also standing in that land. By making reference to PW1 Head Clerk (Senior Assistant), Tehsildar Office, Hoshiarpur, counsel argued that the prices of land ranges between ` 52,000/- and ` one lac per marla. He has also made reference to various sale instances to support the above said contention. He further argued that there is nothing on record to show that land does not have potential to develop it as residential and commercial area. There is no evidence on record to show that the land was low lying and dirty water used to stagnate in it. By making reference to the statement made by Arjun Khanna (PW3) a Draftsman, he argued that the residential houses and shops were in existence near to the land under acquisition and further that facility of sewerage and water supply was available through a municipal Tube-well. By stating as above, he prayed that award passed by the Tribunal, be suitably modified and compensation be enhanced to the tune of ` 50,000/- per marla. To the contrary, counsel for the Improvement Trust, by making reference to the statements made by RW1 to RW5 and also documents R1 to R4, tried to show that the amount of compensation was rightly awarded by the Land Acquisition Collector, as per the rates fixed by the Collector for the area in question. He further argued that the Collector’s rate was fixed by taking note of the mutations incorporated regarding the land sold and 5 Civil Writ Petition No.20433 of 2009 purchased between 30.7.1993 and 29.7.1994. By stating that area was low lying and was not suitable for residential purpose because rainy water used to stagnate upon it during rains, he prayed that compensation awarded by the Collector be restored and granted by the Tribunal be set aside. Heard counsel for the parties. We are to see as to what are the requirements to determine value of the land under acquisition. Section 23(1) of the Land Acquisition Act lays down the parameters to be considered by the Courts before assessing market value of the land. Similarly, Section 24 of the Land Acquisition Act lays down the factors which are not to be considered by the Courts when awarding the compensation. The market value of the land, subject matter of acquisition, is a price that a willing purchaser would like to pay to the willing seller for the property, taking note of existing condition of the land, its potential possibilities and its disadvantages. Their Lordships of the Supreme Court in Atma Singh (dead) through L.R.s and others v. State of Haryana and others, (2008) 2 Supreme Court Cases 568, while dealing with a similar situation observed as under:- “4…………….The guiding star would be the conduct of hypothetical willing vendor who would offer the land and a purchaser in normal human conduct would be willing to buy as a prudent man in normal market conditions but not an anxious dealing at arms length nor facade of sale nor fictitious sale brought about in quick succession or otherwise to inflate the market value. The determination of market value is the prediction of an economic event viz., a price outcome of hypothetical sale expressed in terms of probabilities. See Kanta Prasad v. State of Bihar, AIR 1976 SC 2219; Prithvi Raj 6 Civil Writ Petition No.20433 of 2009 Taneja v. State of M. P., AIR 1977 SC 1560; Administrator General of West Bengal v. Collector, Varanasi, AIR 1988 SC 943 and Periyar v. State of Kerala, AIR 1990 SC 2192. 5. For ascertaining the market value of the land, the potentiality of the acquired land should also be taken into consideration. Potentiality means capacity or possibility for changing or developing into state of actuality. It is well settled that market value of a property has to be determined having due regard to its existing condition with all its existing advantages and its potential possibility when led out in its most advantageous manner. The question whether a land has potential value or not, is primarily one of fact depending upon its condition, situation, user to which it is put or is reasonably capable of being put and proximity to residential, commercial or industrial areas or institutions. The existing amenities like, water, electricity, possibility of their further extension, whether near about Town is developing or has prospect of development have to be taken into consideration. See Collector Raigarh v. Hari Singh Thakur, AIR 1979 SC 472, Raghubans Narain v. State of U.P., AIR 1967 SC 465 and Administrator General, W. B. v. Collector Varanasi, AIR 1988 SC 943. It has been held in Kaushalya Devi v. L.A.O. Aurangabad, AIR 1984 SC 892 and Suresh Kumar v. T.I. Trust, AIR 1989 SC 1222 that failing to consider potential value of the acquired land is an error of principle.” In the present case, in view of evidence on record, it can safely be said that the land had potential to develop it as a residential and 7 Civil Writ Petition No.20433 of 2009 commercial area. As per admitted case of the parties, land is situated within the municipal limits of municipal committee Hoshiarpur. On its two sides, 25 meters wide roads, leading to Garh Shankar and Phagwara are in existence. There were 52 built up structures, fruit bearing trees, other trees and 3 tube-wells are situated in the land in dispute. Some shops were also constructed in the area under acquisition. It has also come on record that Mahavir Spinning Mill, Hawkings Cooker factory and some other offices are also situated next to the land under acquisition. Contention of counsel for the respondent –Improvement Trust that area was low lying and rainy water used to stagnate in it, has no legs to stand. To support the above said contention, reference has been made to the statement made by Hartej Kaur (PW2), who, during her cross-examination, has stated that her plot was 4-5 feet at the lower level than the Fatehgarh- Rahimpur road. We are of the opinion that in view of above said fact alone, it cannot be presumed that area was low lying and dirty water used to stagnate in it. It may be lower in level so far as the adjoining road is concerned. It is common knowledge that the roads are generally constructed after raising its plinth so that it may not be damaged during rains etc. None of the witnesses produced by the Improvement Trust has said a word about this fact. One of them has even admitted that sewerage system, pipeline water supply is available in the Hoshiarpur city. The very fact that 52 buildings, three tube- wells, fruit bearing trees and other trees were in existence in the land under acquisition, proves that it was not a low lying area. After giving a finding that the land has potential possibilities, we can safely say that the compensation awarded by the Land Acquisition 8 Civil Writ Petition No.20433 of 2009 Collector was not proper. The claimants / land owners have brought on record the following sale instances:- Ext. Date of Sale Area sold K M Consideration P1 9.8.1998 0-17 Rs.34,000/- P5 17.7.1992 1-03 Rs.60,000/- P9 5.7.1994(shop) 0-02 Rs.70,000/- P10 5.3.1992(shop) 0-02 Rs.40,000/- P11 5.5.1993 0-04-01 sar Rs.65,000/- P13 10.10.1983 0-05 (Sale by Tehsildar) Rs.18,200/- P17 24.8.1994 0-10 Rs.1,20,000/- P18 8.1.1993 0-06 Rs.30,000/- P19 12.4.1994 0-09 Rs.63,000/- P28 29.4.1983 0-05-/12 Rs.29,700/- Ex.P29/ A 13.5.1981 1-00 Rs.20,000/- P30 31.8.1992 0-05-5 Sq.ft. Rs.15,000/- P31 24.6.1991 0-10 Rs.25,000/- P32 14.8.1992 0-12 Rs.36,000/- P37 26.5.1992 0-10 Rs.30,000/- P39 12.2.1993 1-00 Rs.1,00,000/- MarkB 27.5.1987 1-02 Rs.15,000/- To the contrary, reliance has been placed upon the Collector’s rate fixed by the Deputy Commissioner, which was brought on record in the shape of letters EX.R1 and Ex.R2 dated 13.8.1996, in which, rates were mentioned as under:- “Village Purhiran Kind of land Rate per acre No of mutations on which the rates were based Chahi Rs.1,07,907-20 Two Barani Rs.1,19,534-20 Ten Chahi/Barani Rs.85,092-00 four Gair mumkin abadi Rs.5,03,820-00 Three Jhungi Darakhtan Rs.3,80,952-00 One Bagicha Barani Rs.50,793-60 Three Village Sutehri 9 Civil Writ Petition No.20433 of 2009 Kind of land Rate per acre No. of sale deds mutations/ on which the rates were based Chahi Rs.3,53,440-00 Seventeen Makhloot/ Gair Aabpash/ Barani Rs.2,80,160-00 four Gair mumkini Rs.7,23,200-00 Three Bagicha Chahi Rs.9,60,000-00 One MAkhloot Aabparh Rs.8,03,720-00 Two Banjar Qadim Rs.3,05,280-00 four The Land Acquisition Collector, by relying upon above said evidence awarded the compensation, as found mentioned in earlier part of this order, which, we are of the opinion, was rightly enhanced by the Tribunal. Contention of counsel for respondent No.2 (Improvement Trust) that sale instances brought on record by the land owners were of small pieces, as such, those be ignored, is liable to be rejected. The Tribunal, by making reference to various judgments of the Hon’ble Supreme Court and this Court, has rightly held that the sale instances, even of the small pieces of land, can be relied upon, to determine market value of the land under acquisition, if those instances are reliable. In this case, land under acquisition is only 51 kanals 3 marla. It was already being used for residential purposes and at the time of acquisition, 52 structures/ buildings, including some shops, were in existence. The very fact that the land was being sold and purchased in small pieces, indicates that the land had residential and commercial prospects. If sale instances are of small area, as per law, cut between 20% and 33% can be imposed. Their Lordships of the Hon’ble Supreme Court in Atma Singh’s case (supra), after discussing various judgments on the issue, observed as under:- 10 Civil Writ Petition No.20433 of 2009 14. The reasons given for the principle that price fetched for small plots cannot form safe basis for valuation of large tracks of land, according to cases referred to above, are that substantial area is used for development of sites like laying out roads, drains, sewers, water and electricity lines and other civic amenities. Expenses are also incurred in providing these basic amenities. That apart it takes considerable period in carving out the roads making sewers and drains and waiting for the purchasers. Meanwhile the invested money is blocked up and the return on the investment flows after a considerable period of time. In order to make up for the area of land which is used in providing civic amenities and the waiting period during which the capital of the entrepreneur gets locked up a deduction from 20% onward, depending upon the facts of each case, is made.” Under similar situation, their Lordships of the Hon’ble Supreme Court in Gulzara Singh v. State of Punjab, 1993(3) RR.R. 247, justified imposition of 1/3rd cut. Same is the ratio of the judgment of the Hon’ble Supreme Court in Brig. Sahib Singh Kalha etc. v. Amritsar Improvement Trust and others, 1982 A.I.R. (SC) 940, wherein it was observed as under:- “It is well settled principle of valuation that where there is a large area of undeveloped land under acquisition, provision has to be made for providing the minimum amenities of town life such as water connections, well laid-out roads, drainage facility, electric connections etc. The process necessarily involves deduction of the cost of factors required to 11 Civil Writ Petition No.20433 of 2009 bring the undeveloped lands on a par with the developed lands. An extent of 20 per cent of the total land acquired is normally taken as a reasonable deduction for the space required for roads. This is apart from the cost of laying roads themselves and the cost of providing other amenities like electricity, water, underground drainage etc. In Tribeni Devi v. Collector of Ranchi, (1972) 3 SCR 208, the Court allowed a deduction of 33-1/3 per cent towards the cost of development. The cost of development may range from 20 to 33 per cent depending on the nature of the land, its situation and the stage of development etc. The Tribunal had before it material on which it directed a cut of 33 per cent of the market value in one and 20 per cent in the other. It cannot be said that the aforesaid deductions were arbitrary or unreasonable having regard to the fact that the land acquired is an undeveloped area and the award of the Tribunal is based on the ‘belting’ principle.” Sale instances Ex.P9, P10, P13, P28, P30, P31 and P32 pertain to the land under acquisition. Others are of the land situated nearby. We can not place reliance on the sale instances Ex.P9, P10 because those were the shops. Vide Ex.P13 in the year 1993, 5 marla of land was purchased for an amount of ` 18,200/-, if that is accepted, the land owners shall be entitled to much more compensation than the one granted by the Tribunal. We have perused the sale deed executed in the year 1993 and are satisfied that this solitary sale instance, cannot be made basis for determination of the market value in this case as all the sale instances thereafter, are for the lesser value. Under what circumstances this land was sold in the year 1993 at a much 12 Civil Writ Petition No.20433 of 2009 higher price, is not forthcoming on record. Otherwise also, the sale instance given in Ex.P28 has no proximity with the time at which land was acquired. On the same ground, we can ignore sale instance Ex.P31, executed in the year 1991. Sale instances given in Ex.P30 dated 31.8.1992 and P32 dated 14.8.1992 are in close proximity to the date on which land was acquired i.e. 29.7.1994. Vide above said two sale deeds (Ex.P30 and P32), 17 marlas of land was purchased for an amount of ` 51,000/-, which would mean ` 3,000/- per marla. By imposing 1/3rd cut, as per ratio of the judgment of the Hon’ble Supreme Court, the market value of the land would come to ` 2,000/- per marla. Contention of counsel for respondent No.2 that the market value be assessed as per price shown in letters Ex.R1 and R2 is liable to be rejected. As is evident from those letters, price was assessed by taking note of some mutations sanctioned between 30.7.1993 and 29.7.1994. Those letters were brought on record by Mr.Sarwan Kumar, Junior Assistant working in the office of Deputy Commissioner, Hoshiarpur (RW1). Neither in the written statement nor in the letters, it was mentioned as to how much land was sold/ purchased vide the sale instances, mentioned in those letters and what was the distance of that land from the land under acquisition. Once, sale instances from the area of land under acquisition are available, may be of small pieces, it is not possible for us to rely upon the sale instances from outside the area, regarding which, no further detail has been given. RW1 has specifically stated that he had no personal knowledge regarding situation of the property and quality etc. of the acquired land and that he had not seen the sale deeds, vide which, this land was sold. Whereas, to the contrary, Chanchal Rani (PW18) Avtar Kaur (PW20) have come in the witness box and proved the sale instances Ex.P30 and P32. 13 Civil Writ Petition No.20433 of 2009 In view of facts mentioned above, no reliance can be placed upon the rates shown in letters Ex.R1 and R2, prepared by the office of Deputy Commissioner, Hoshiarpur. Counsel for the claimants contended that the sale instances Ex.P30 and P32 were executed in the month of July 1992 and August 1992, notification under Section 36 of the Act was issued in the month of July 1994 i.e. after about two years of the execution of the sale deeds, referred to above. It is prayed that for each year, enhancement @ 12% be added in the amount assessed. We are of the opinion that argument raised is perfectly justified and taking note of trend of rise in prices in the land every year, for the two years, we grant benefit of ` 400/- @ 10% for each year. In this manner, total amount of compensation payable to the land owners would come to ` 2400/- per marla. It was so said by their Lordships of the Hon’ble Supreme Court in Om Parkash and another v. Union of India and another, 2004(3) PLR 727. As respondent No.2 has failed to show any qualitative difference so far as land, which is subject matter of acquisition, situated in village Purhiran and Sutehri is concerned, we award this amount for the total acquired land for both the villages, which is about 59 kanals 3 marlas. The land owners shall be entitled to all statutory benefits available to them under the provisions of Land Acquisition Act. In view of findings given above, the writ petitions filed by the land owners are allowed and the writ petitions filed by Improvement Trust (respondent No.2) are dismissed. (Jasbir Singh) Judge 14 Civil Writ Petition No.20433 of 2009 17.08.2010 (Augustine George Masih) gk Judge 15