:1: IN THE HIGH COURT OF BOMBAY AT GOA FIRST APPEAL NO. 140 OF 2006 WITH FIRST APPEAL NO. 164 OF 2006 FIRST APPEAL NO. 140 OF 2006 Communidade of Nagoa, Having its office at Majilvaddo, Nagoa, Salcete, Goa. Through its Attorney, Shri Joaquim Vicente Cabral … Appellant V e r s u s 1. Special Land Acquisition Officer, Goa, IDC, Midas Touch Bldg., 2nd Floor, Opp. EI Dourado Plaza, Panaji Goa. 2. The Managing Director, Goa, IDC, Shree Saraswati Mandir Building, 18th June Road, Panaji. … Respondents Mr. S. D. Padiyar, Advocate for the Appellant. Mr. M. Sonak, Advocate for the Respondent No.2. WITH FIRST APPEAL NO. 164 OF 2006 Communidade of Cortalim, through its Special attorney, Shri Pedro Estanislau Carvalho alias Peter Carvalho, r/o H.No.116, Nauta, Cortalim, Mormugao, Goa. … Appellant :2: V e r s u s 1. Special Land Acquisition Officer, Goa, IDC, Midas Touch Bldg., 2nd Floor, Opp. EI Dorado Plaza, Panaji Goa. 2. The Managing Director, Goa, IDC, Shree Saraswati Mandir Bldg., 18th June Road, Panaji Goa. … Respondents Mr. I. Agha, Advocate for the Appellant. Mr. M. Sonak, Advocate for the Respondent No.2. CORAM : S. B. DESHMUKH & F. M. REIS, JJ. JUDGMENT RESERVED ON : 13 th DECEMBER, 2010 . JUDGMENT PRONOUNCED ON : 23 rd DECEMBER,2010. JUDGMENT ( Per F. M. REIS, J) Both the above Appeals are taken up for final hearing together in view of the earlier order passed directing that both the Appeals be heard together. Facts and submissions in First Appeal No. 140 of 2006. 2. By a notification issued under Section 4 of the Land Acquisition Act, 1894 (hereinafter referred to as the said Act ) the Respondents intended to acquire land for setting up of an Industrial Training/Industrial purpose at :3: Nagoa Village of Salete Taluka and Cortalim Village of Mormugao Taluka. The land acquired was notified for the acquisition by a notification bearing No. 22/136/97-RD dated 16th February, 1999 and published in the Official Gazette on 4th March, 1999. An award under Section 11 of the said Act was passed on 16th April, 2002 fixing the market value of the land acquired at the rate of Rs.8/- per square metre for the orchard zone and Rs. 12/- per square metre for the land in E.P.Z. Being dissatisfied with the said amount, the Appellant preferred the reference under Section 18 of the said Act for enhancement of the compensation and sought a compensation for the land acquired at the rate of Rs.500/- per square metre. By judgment and award dated 8th March, 2006, the Reference Court answered the reference in the negative. Being aggrieved by the said judgment and award, the Appellant have preferred the present appeal. 3. Learned Counsel Shri S. D. Padiyar appearing for the Appellant has assailed the impugned judgment and submitted that the Reference Court has totally misdirected itself in rejecting the reference filed by the Appellants. He further submitted that the Appellant have produced the sale instances of comparable lands which discloses that the market value of the land acquired is much more than the one offered by the Land Acquisition Officer. Learned Counsel further submitted that the Appellant were entitled for a minimum :4: compensation of Rs.500/- per square metre for the land acquired. Learned Counsel further submitted that the Reference Court has totally erred in coming to the conclusion that the land had no potentialities of being used for construction purpose solely on the ground that the land was belonging to the Communidade. Learned Counsel further submitted that the Division Bench of this Court in the judgment passed in First Appeal No.283 of 2002 dated 24th June, 2010 held that the Communidade land had in fact potentialities of being used for non agricultural purpose subject to appropriate deductions for complying the statutory requirements under the Code of Communidade. Learned Counsel further submitted that there is evidence on record to substantiate the comparability of the land acquired with the sale instances and as such the Appellant should be awarded compensation at the rate of Rs.500/- per square metre. Learned Counsel further submitted that this Court in the judgment passed in First Appeal No. 300 of 2003 with regard to the notification of the year 1990 in the vicinity of the acquired land has awarded compensation on much higher rates than the one offered by the Land Acquisition Officer. Learned Counsel further submitted that the Reference Court has not even done the exercise of ascertaining the comparability of the land vis-a-vis sale deed plot and as such the evidence on record deserves to be re-appreciated in the light of the said judgment passed by this Court. Learned Counsel further submitted that in the interest of justice, the matter deserves to :5: be remanded to the Reference Court for fresh adjudication of the reference filed by the Appellant in the light of the judgment passed by this Court. Facts and submissions in First Appeal No. 164 of 2006 4. The land belonging to the Appellant was intended to be acquired pursuant to a notification under Section 4 of the said Act dated 16th February, 1999 published in the Official Gazette on 4th March, 1999. The area acquired belonging to the Appellant was admeasuring an area of 76,100 square metres from the property surveyed under No. 166/1. The Land Acquisition Officer by award under Section 11 of the said Act fixed the market value of the land acquired at the rate of Rs.8/- per square metre for the orchard zone and Rs. 12/- per square metre for the land in E.P.Z. Being dissatisfied with the said amount, the Appellant sought a reference under Section 18 of the said Act for enhancement of compensation and claimed an amount of Rs.500/- per square metre for the land acquired. By judgment and award dated 8th March, 2006, the Reference Court answered the reference in the negative. Being aggrieved by the said judgment and award, the Appellant have preferred the present appeal. 5. Learned Counsel Shri I. Agha appearing on behalf of the Appellant has adopted the submissions of learned Advocate Shri S. D. Padiyar :6: appearing for the Appellant in First Appeal No. 140 of 2006. Learned Counsel further pointed out that the Reference Court has misdirected itself in rejecting the reference without considering the material on record which establishes that the amount offered by the Land Acquisition Officer was inadequate. Learned Counsel further pointed out that the land of the Appellant had high potentiality of being used for non agricultural purpose and the Reference Court erred in coming to the conclusion that the land of Communidade has no such potentiality. Learned Counsel further submitted that in view of the judgment passed by this Court in other proceedings in respect of the land in the vicinity of the acquired land, the Appellant should be permitted to lead additional evidence to establish the comparability of the land acquired with the land in the said awards in support of their claim for enhancement of compensation. 6. On the other hand, Shri Sonak, learned Counsel appearing for the Respondents supported the impugned judgment in both the appeals and submitted that there is no evidence on record to substantiate the claim of the Appellant for enhancement of compensation. He further pointed out that there is no comparability between the land acquired and the subject matter of the sale instances produced by the Appellant. Learned Counsel further submitted that though the lands in the judgments passed by this Court are in the vicinity of the acquired land nevertheless the Appellant would have to establish the :7: comparability of the land acquired vis-a-vis the said awards. He further submitted that the Respondents would also be entitled to lead evidence to substantiate their claim that the price offered by the Land Acquisition Officer was just and proper and that the Appellant are not entitled for any enhancement of compensation. He further submitted that the Respondents should also be permitted to lead evidence in rebuttal in case any evidence is led by the Appellant in support of their claim of enhancement. Consideration, submissions and conclusions in both the above Appeals. 7. We have carefully perused the evidence on record as well as the impugned judgments and considered the submissions advanced by the Counsel for the respective parties. On perusal of the impugned judgments, we find that the Reference Court has come to the conclusion that the acquired land being the land belonging to the Communidade and in view of the restrictions to transfer the Communidade land in the Communidade Code, it cannot be considered that such land belonging to the Appellant is free hold land and could be compared with the sale instances produced by the Appellant. The Reference Court has also discarded the evidence of the expert on the ground that the sale instances relied upon by the said expert of free hold land cannot be compared to the Communidade land. :8: 8. On this aspect, the Division Bench of this Court in a judgment passed in First Appeal No. 283 of 2002 dated 24th June, 2010 has held at paras 13, 14, 15 thus : “13. When a land is described as a freehold land, it has reference to the tenure of the land. The characteristic of a freehold tenure is that there is inheritability and transferability as a matter of right. In case of a land held by a communidade, there is no defect in the title or ownership of the Communidade, but the restriction is on transferring the land held by the Communidade by way of sale, lease or exchange. Restriction is that such a transfer by way of sale cannot be made without prior sanction. There is no complete prohibition against effecting such transfer. In case of an insolvency of Communidade, there is a power to sell land of Communidade. However, there is a general power vesting in a Communidade by virtue of Article 30 of the Code to transfer its land by sale, lease or exchange with the sanction. 14. While assessing the market value for the purpose of Section 23 of the said Act of 1894 by :9: comparison method, the test adopted is what a prudent and genuine buyer will offer as a price of the acquired land. In case of a hand, which is not freehold in the sense that a transfer thereof cannot be effected without sanction of the authorities, a willing bona fide buyer may not offer the same price, which he may offer in respect of a comparable freehold land as the buyer will be conscious of the fact that there are restrictions on transferability or that the authority empowered to sanction sale may impose some conditions. Therefore, he may offer to some extent a lesser price to the land having such restrictions. However, it cannot be said that the sale instance of a freehold land which is otherwise comparable to the acquired land cannot afford a basis to determine the market value of a land, which is having restrictions on transfer. The Apex Court in the case of Viluben Zhalejar Contractor V/s State of Gujarat; [(2005) 4 SCC 789] has discussed various factors relating to fixing market value on the basis of comparison method. Para 19 and 20 of the said decision read thus : :10: “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 time 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-a-vis the land under acquisition by placing the two in juxtaposition. The positive and negative factors are as under : Positive factors Negative factors :11: (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 area (iv) lower level requiring the depressed portion to be filled up (v) regular shape (v) remoteness from developed locality (vi) level vis-a-vis land under acquisition (vi) some special disadvantageous factors which would deter a purchaser (vii) special value for an owner of an adjoining property to whom it may have some very special advantage.” 15. The aforesaid decision does not contain exhaustive list of negative factors. In case of a land held by a Communidade, the restriction on transfer will be one of the negative factors, which will have to be considered while fixing the market value. Taking into consideration the said negative factor, some deduction will have to be made depending upon the :12: facts of a particular case while fixing the market value on the basis of a comparable sale instance of a freehold land. In the case of Krishna Yachendra Bahadurvaru V/s The Special Land Acquisition Officer; AIR 1979 SC 869, the Apex Court held that the process of determination of the market value invariably involves the evaluation of many imponderables and hence it must necessarily be to some extent a matter of conjecture or guess. Therefore, we find that the submission that the market value of the land vesting in Communidade cannot be determined on the basis of sale instance of a comparable freehold land, will have to be rejected by holding that the market value of a land vesting in Communidade can be determined on the basis of comparable sale instance of a freehold land by making appropriate deductions considering the peculiar facts of the case on account of restrictions on transferability of the acquired land vesting in Communidade”. :13: 9. In view of the said judgment of this Court, we find that the Reference Court has erred in coming to the conclusion that the sale instances produced by the Appellant cannot be considered for the purpose of determining the market value of the land acquired. 10. There is no dispute that in the judgment passed by this Court in First Appeal No. 300 of 2003 the subject matter of the land was also located in Nagoa Village which was acquired for the expansion of the Verna Industrial Estate. There are also other judgments passed by this Court determining the market value of the land acquired for the Verna Industrial Estate which is in the vicinity of the land acquired. There is no doubt that the Appellant have not led any evidence to establish the comparability of the land acquired vis-a-vis the land which was the subject matter of the said judgment passed by this Court. It is well settled that the land sought to be compared must be similar in potentiality and its nature. Unless such evidence is adduced, it would not be possible to determine the market value of the land acquired on the basis of the sale instances sought to be relied upon by the Appellants. Besides that the Appellant have also produced other sale instances which according to them were comparable to the land acquired. All the said sale instances were not considered by the Reference Court merely on the ground that such sale instances were with regard to the free hold lands and not Communidade land :14: which ground does not survive. In view of the said judgment of this Court in First Appeal No. 283 of 2002, we find that in the interest of justice, the matter deserves to be remanded to the Reference Court for fresh adjudication of the references filed by the Appellant after giving both the parties an opportunity to lead further evidence in support of their respective contentions. The Appellant would have to produce evidence to substantiate their claim that the land acquired is comparable with the land which was the subject matter of the said judgment passed by this Court. No doubt the Respondents will be entitled to lead evidence in rebuttal to dispute the said contentions of the Appellants. The Reference Court would thereafter pass a fresh decision after scrutinizing the evidence on record. 11. In view of the above, we pass the following order : O R D E R (i) Both the above Appeals are partly allowed. (ii) The impugned judgments dated 8th March, 2006 passed in Land Acquisition Case Nos. 50/2002 and 51/2002 are quashed and set aside. Land Acquisition Case Nos. 50/2002 and 51/2002 are restored to the file of the Reference Court. (iii) The Reference Court is directed to decide the references filed by the Appellant afresh after giving both the parties an :15: opportunity to lead further evidence in the light of the observations made herein above in accordance with law. (iv) Both the Appeals stand disposed of accordingly with no order as to costs. (v) The parties are directed to appear before the Reference Court on 24th January, 2011 at 10.00 a.m. S. B. DESHMUKH, J F. M. REIS, J at*