IN THE HIGH COURTOF PUNJAB AND HARYANA, CHANDIGARH. RFA No.1879 of 1997 Date of decision: 2.8.2011 Om Parkash and others .....Appellants. vs. State of Haryana ....Respondent CORAM: HON'BLE MR.JUSTICE RAKESH KUMAR GARG. --- Present: Mr.Shailendra Jain Advocate, for the petitioner. Mr.D.D.Gupta, Addl.A.G.Haryana, for the State. Rakesh Kumar Garg,J. This judgment shall dispose of ten Regular First Appeals bearing No.2336 of 1993, 1385, 1469,1470,1471,1472,1473,1918 and 1879 of 1997, as all these appeals have arisen out of one common award dated 13.3.1997 passed by the Reference Court under Section 18 of the Land Acquisition Act, 1894 ( for short “the Act”). The facts are taken from RFA No.1879 of 1997. Briefly stated, the facts of the case are that the Haryana Government vide notification No.LAC (P)-NTLA-87.4182 dated 31.3.1987 published in Haryana Government (Extraordinary) Gazette dated 31.3.1987 intended to acquire a large chunk of land measuring 232 acres approximately for a public purpose, namely, for development and utilisation of land as recreational and commercial for Sector-3, Urban Estate,Panchkula in the revenue estate of village Devi Nagar Hadbast No.384 tehsil Kalka District Ambala. The aforesaid notification was followed by a declaration under section 6 of the Act, notifying that the land was acquired for the aforesaid purposes vide notification dated RFA No.1879 of 1997 2 15.8.1988. The Land Acquisition Collector vide his award dated 27.3.1989 awarded compensation at the rate of Rs.1,32,000/- per acre for land measuring 227.36 acres. The value of remaining land measwuring 4.79 acres falling in Khasra No.312, 558,562,563,565, 613, 614, 617 and 619 all min, was assessed at the rate of Rs.60,000/- per acre. Compensation in respect of trees i.e. fruit bearing and non fruit bearing was also assessed in the case of Jawant Rai. Feeling dissatisfied with the aforesaid award of the Collector, the claimants-landowners filed reference under Section 18 of the Act, on the ground that the Collector has not assessed the market value correctly. It was stated that the land in dispute is situated at very advantageous place and is having commercial as well as residential potentiality. Even the Collector in his report had mentioned that the land abuts National Highway No.22 and adjoins the land of other villages already acquired for residential and commercial purposes and having a very beautiful panoramic view. The adjoining land of Panchkula is sold at the rate of Rs.1000/- to Rs.20,000/- per sq.meter and thus the value of the land in question cannot be less than Rs.1000/- per square meter at the time of acquisition. Claimants also prayed for compensation on account of severance of land. State of Haryana filed written statement contesting the claim of the landowners submitting that the award pronounced by the Collector was just and fair which was pronounced on the basis of the rates supplied by the District Collector, who was competent authority under the revenue law, to assess such rates and he has also taken into consideration the relevant sale deeds. The claim of the landowners was highly exaggerated and dismissal of the reference was prayed. RFA No.1879 of 1997 3 In order to prove their averments, claimants examined Shiv Ram Clerk, office of Estate Office,HUDA,Panchkula as PW1, Nanu Mal as PW2, Som Nath Patwari, office of the Land Acquisition Collector as PW3, Achint Kalsi, Surveyor as PW4,Balbir Singh SDO PWD Horticulture (Pb.) as PW5, Sumer Chand Shopkeeper as PW6, claimant Jaswant Rai as PW7, Arun Dutt Patwari Halqa Majri as PW8, Roshan Lal (one of the claimants) as PW9, Pritam Ssingh, Clerk, Office of Tehsildar as PW10 and Shashi Khanna, Clerk, SDM Office, Panchkula as PW11. On the other hand, respondent examined Amrik Singh Junior Engineer as RW1. It is relevant to mention that respondents except placing on record an award dated 23.3.1993 Ex.R1 vide which acquisition of the land of village Devi Nagar was acquired through this notification had already been assessed to the tune of Rs.1,50,000/- per acre, and has produced no other evidence. The Additional District Judge,Ambala vide impugned award assessed the value of the land in question at Rs.1,50,000/- per acre for all the categories of land. In addition thereto, the claimants were also held entitled to solatium at the rate of 30% and other statutory benefits and costs which were assessed at the rate of Rs.500/-. The aforesaid award Ex R1 is also under challenge before this Court by way of RFA No.2336 of 1993. Still not satisfied from the aforesaid award of the reference Court the landowners are before this Court claiming further enhancement in compensation. Learned counsel appearing on behalf of the appellants- landowners has vehemently argued that the land in question which falls within the revenue estate of village Devi Nagar was acquired for RFA No.1879 of 1997 4 development of commercial and recreational activities and sector-3 of Panchkula was carved out. It is adjoining to Panchkula bearing sectors 2,4, 21 and Sector-5 Panchkula is also very near to the place which is developed as commercial center. There are other establishments near the land in question and acquired land was having potentiality to be developed for commercial as well as residential purposes. The land in question is parallel to the National Highway No.22. The prices in other sectors are very high. Those sectors are already developed for commercial and residential purposes. Learned counsel for the appellants has referred to letters Ex.PW10/A dated 2.1.1990 and another letter Ex.PX dated 9.1.1990, to indicate that the value of land of sectors for the purpose of registration of sale deeds for residential purposes was fixed at Rs.300/- to Rs.500/- per square meter and for commercial purposes Rs.3000/- per square meter. It is the case of the appellants that the land of village Devi Nagar remained notified for acquisition time and again since the year 1973. So, no sale transaction took place in the area because nobody was willing to purchase the land going to be acquired and thus for determining the real market value of the land in question this Court has to fall back upon the other evidence which is judicially accepted. By referring to the various akshijra i.e. Ex.P8/A to Ex.P8/D, learned counsel for the appellants has submitted that boundaries of village Devi Nagar adjoin to village Mahesh Nagar, Judian, Majri and Kharak Mangoli i.e,. the villages whose land was acquired for development of various sectors and, thus, the various awards passed by the Reference Courts in these villages adjoining to the acquired land which were passed were relevant. In the end learned counsel for the appellants by RFA No.1879 of 1997 5 referring to a decision of this Court passed in the case of Parkash Rani v. The State of Haryana, RFA No. 41 of 1997 decided on 29.10.1999 for acquired land of Kharak Mangoli and Majri tehsil Kalka District Panchkula, which was acquired vide notification issued under section 4 of the Act dated 2.7.1985, wherein the market value has been determined at the rate of Rs. 250/- per square yard along with all other statutory benefits for the land and has submitted that the compensation be enhanced giving suitably yearly increase on the said rate of Rs.250/- per square yard for the land acquired in the year 1985. On the other hand, learned State counsel has argued that the value assessed by the Collector is just and fair which has been done after taking into consideration all the facts and circumstances. It was further submitted that vide Annexure R1 i.e. the award dated 23.3.1993 land of village Devi Nagar which was also acquired vide same notification dated 31.3.1987 issued under section 4 of the Act for the same purpose along with the acquired land in question, was assessed at Rs.1,50,000/- per acre and therefore, the appeals should be dismissed. I have heard the learned counsel for the parties and perused the impugned award and the documents/evidence on record with the help of learned counsel for the parties. Section 23 of the Act governs determination of compensation payable on the basis of market value of the land: whereas Section 24 of the Act provides about certain matters which are to be excluded while determining the market value. However, Act does not define “market value”. The matter, however, has not been left to the vagaries of mere RFA No.1879 of 1997 6 opinion and absolute discretion of the Tribunal/courts and has rather been settled by Hon'ble Supreme Court in various pronouncements. In Atma Ram Vs. State of Haryana reported in 2008 (1) Law Herald 1=2008(2) SCC 568, Hon'ble Supreme Court explained about the expression “market value” in the following words: “ In order to determine the compensation which the tenure-holders are entitled to get for their land which has been acquired, the main question to be considered is what is the market value of the land. Section 23(1) of the Act lays down what the courthas to take into consideration while Section 24 lays down what the Courtshall take into consideration and have to be neglected. The main object of the enquiry before the court is to determine the market value of the land acquired. The expression `market value has been subject matter of consideration by this court in several cases. The market value is the price that willing purchaser would pay to a willing seller for the property, having due regard to its existing condition with all its existing advantages and its potential possibilities when led out in the most advantageous manner excluding any advantage due to the carrying out of the scheme for which the property is compulsory acquired. In considering market value the disclination of the vendor to part with his land and the urgent necessity of the purchaser to buy should be disregarded. The guiding start would 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.” RFA No.1879 of 1997 7 Hon'ble Supreme Court relied on previous rulings rendered in Thakur Kanta Prsasad Singh (dead by LRs) V. State of Bihar, AIR 1976 SC 2219: Pirthvi Raj Taneja (dead) by LRs V. State of M.P,AIR 1977 SC 1560: Administrator General of West Bengal vs. Collector, Varansi, AIR 1988 SC 943 (1); and Periyar and Pareekanni Rubbers Ltd. V. State of Kerala AIR 1990, SC 2192. Thus, the phrase “ market value of the land” as used in Section 23(1) of the Act means ordinarily “value to the owner”. The value of the land to the owner, therefore, must be the basis for determination of the compensation. But the standard must be not a subjective standard but an objective one. Ordinarily, the objective standard would be the price that an owner willing and not obliged to sell, might reasonably expect to obtain from a willing purchaser with whom he has bargaining for the sale of the property. In fixing the market value of the land, the court has to take into account the potential value of the land at the time of its acquisition. The assessment of the potential value on the basis of its expected use in the near future for such profitable purposes can be shown only when the expected user for such purpose is almost a certainty or a proximate possibility and is so obvious that its value can be ascertained with reasonable consideration of the realities of a situation. In Atma Ram vs. State of Haryana reported in 2008 (1) LAW HERALD 1 (cited supra), Hon'ble Supreme Court held as under:- “ 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 RFA No.1879 of 1997 8 developing into state of actuality. It is well settled that market value of a property has to be determined having due regard to it 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 The Collector Raigarh V. Dr. Hari Singh Thakur and another, AIR 1979 SC 472, Raghubans Narain Singh V. State of U.P. Govt. through Collector of Bijnor AIR 1967 SC 465 and Administrator General,W.B. V. Collector Varansi, AIR 1988 SC 943. It has been held in Smt. Kaushalya Devi Bogra and others Vs. L.A.O.Aurangabad and another AIR 1984 SC 892 and Suresh Kumar V. T.I.Trust, Bhopal, AIR 1989 SC 1222 that failing to consider potential value of the acquired land is anerror of principle”. In the case in hand, with regard to the surrounding of the acquired land there is no dispute between the parties. In fact, potential value of the land could not be disputed by the respondents. Having noticed the potentiality of the suit land, the next question is that what method of valuation should be adopted for ascertaining the market value of the suit land. In this regard, it has been observed by Hon'ble Supreme Court in Koyappathodi M.Ayisha Umma Vs. State of Kerala AIR 1991 S.C.2027, regarding the method of valuation to be adopted for ascertaining the market value of the land, as follows:- RFA No.1879 of 1997 9 “It is settled law that the methods of valuation to be adopted in ascertaining the market vlaue of the land as on the date of notification are (1) opinion of experts (ii) the price paid within a reasonable time in bonafide transaction of the purchase or sale of the lands acquired or the lands adjacent to the lands acquired and possessing similar advantage and (iii) a number of years purchase of the actual or immediately prospective profits of the lands acquired. These method, however do not preclude the Court from taking any other special circumstances obtained in an appropriate case into consideration. As the object being always to arrive as near as possible in an estimate of the market value in arriving at the reasonable correct market value. It may be necessary to take even two or all those matters into account inasmuch as the exact valuation is not always possible as no two lands may be the same either in respect of the situation or the extent or the potentiality nor is it possible in all cases to have reliable material from which that valuation can be accurately determined”. Similar view was also taken by the Hon'ble Punjab and Haryana High Court in Gurpreet Singh and another Vs. State of Punjab and othes 2005(4) RCR(civil) 807. It will be clear from the aforesaid observations of Hon'ble Supreme Court that no hard and fast rule can be laid down regarding method to be adopted for assessing compensation to be paid and that each case must be considered in view of its own special factors as market value RFA No.1879 of 1997 10 can not be calculated with mathematical precision. It is, in fact, duty of the Court to closely scrutinize evidence and apply the test of a prudent person who is willing to purchase and then determine just and adequate compensation. Further, the comparable sales method of valuation of land is one of the methods, which is normally adopted by the courts to determine the market value of the acquired land. Regarding the applicability of this method and what facts should be kept in consideration while applying this method, it has observed by Hon'ble supreme Court in Shaji Kuriakose Vs. Indian Oil Corp.Ltd & Ors. 2001 (2)LAC 334 =2001 AIR (SC)3341, as follows:- “It is no doubt true that courts adopt Comparable Sales Method of valuation of land while fixing the 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 has been sold in 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 aqcuired 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 RFA No.1879 of 1997 11 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, that (2) the sale deed must have been executed at the time proximate to the date of issue of notification under section 4 of the Act , that (3) the land covered by the sale must be in the vicinity of the acuired land, that (4) the land covered by the sales must be similar to the acuired land and that (5) the size of the plot of the land covered by the sales 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 a dissimilarity in regard to locality, shape, size or nature of land between land covered by sales and land acquired, it is open to court to proportionately reduce the compensation for the acquired land than what is reflected in the sales depending upon the disadvantages attached with the acquired land...........................” In ONGC Ltd versus Sendhabhai Vastram Patel and Ors.2006(1) LACC 388=2005(6)SCC 454, it has been held by Hon'ble Supreme Court that for determining market value of acquired land, the best method would be amount as may be evidenced by sale deeds; and that in the absence of this method, court can take into consideration other method: like judicial precedents, awards etc. In Administrator General of West Bengal Vs. Collector Varansi,AIR 1988 SC 943, it was held by Hon'ble Supreme Court that prices fetched for lands similar to acquired land with RFA No.1879 of 1997 12 similar advantages and potentialities at or about time of preliminary notification constitute best evidence. In the present case, broadly speaking evidence produced by the petitioners, in order to assess the market value of the suit land, can be divided into following categories : (a) HUDA rates, (b) Sale instances, ( c ) Awards of courts and (d) Collector's rates; whereas, respondents have relied upon the sale instances only. As far as the rates at which HUDA offers its plots, the rates of HUDA cannot be looked into. If after development of the land by HUDA, its value has enhanced, no benefit can be given to the appellants. It cannot be disputed that plots are offered for sale by the HUDA after large percentage of the land is left for the development of parks and roads etc. and a huge amount is incurred on the infra-structure like construction of road, sewerage, water supply, electrification, treatment plant, drainage system and various common amenities. In these circumstances, the HUDA rates cannot be made the basis for determining the market value of the acquired land. Moreover, there is no documentary evidence to establish even the HUDA rates in the instant case. Reliance can be made to Tara Devi Vs. State of Haryana 2005(3) PLR 606, wherein it has been observed by this Court that sale price of the plots of HUDA cannot be taken to be reflecting the market value of the acquired land at the time of notification inasmuch as the aforesaid plots were sold by HUDA after developing the same externally as well as internally. It was further observed that in huge acquisition and mass development, only normal compensation should be payable, irrespective of some distance for the location of the land, unless the RFA No.1879 of 1997 13 location of the land is having a total definite distinct advantageous and potential. Similarly Collector's rates for the purpose of registration for the lands for the lands for residential and commercial use has no statutory base and cannot form any base to determine the market value of the acquired land. Reliance can be placed in this regard on a judgment of the Hon'ble Supreme Court in Jawajee Naganathan v. Revenue Divisional Officer, Adalatbad (AP) etc. 1994 LACC 496=1994(2) JT 204. It may also be noticed that in the instant case no sale instances have been relied upon by the parties and the appellants have relied upon a judgment of this Court in Parkash Rani's case (supra) for enhancement of the compensation. However, it may be relevant to mention at the outset that no comparable sale instance of the land in the vicinity are available on the record. Both the parties have failed to produce on record any relevant sale instance of the area. It is well settled that the valuation for the purpose of registration fixed by the government cannot be a indicator of the market value of the land and cannot be relied upon. Thus, the Reference Court rightly ignored the letters Ex.PX and PW10/A fixing the value of residential and commercial areas of Panchkula for the purpose of registration. Though in the oral testimony of witnesses it has come on record that the land was being sold in the adjoining areas after development by the respondents at a very high rate and thus it had a great potential but no reference could be made to any documentary evidence on record. Even otherwise, it is well settled that sale price of land after development cannot be relied upon. In fact, it is the admitted case of the appellants that no relevant evidence is available and the value of the land has to be assessed taking judicial notice of the judgment RFA No.1879 of 1997 14 in Parkash Rani's case (supra) and the principle of increase as settled by the Apex Court. Now the only question to be determined in this case is whether the judgment in Parkash Rani's case (supra) can be relied upon in the present case safely as the true indicator of market value of the land in the vicinity as on 2.7.1985 i.e. the date of notification under section 4 of the Act in this appeal. Shri Shailendra Jain,Advocate, appearing on behalf of the appellants has made strenuous efforts to bring home his submission to the effect that judicial notice of the judgment in Parkash Rani's case (supra) can be taken by this Court for making the basis for determination of compensation in the case in hand and has argued that the documents Ex.PW8/A to Ex.PW8/D and statement of PW9 to the effect that the boundaries adjoining villages of Mahesh Nagar, Judian and ,Kharak Mangoli adjoins the acquired land by referring the statements of PW8 and PW9 and therefore, the judgment of this Court in the aforesaid RFA No. 41 of 1997 which pertains to village Kharak Mangoli and Majri for the land which was acquired on 2.7.1985 is relevant and comparable. Shri Shailendra Jain, has further relied upon the judgment of the Supreme Court in the case of Udho Dass v.State of Haryana 2010 (94)AIC 58 and The General Manager, Oil and Natural Gas Corporation Ltd. v. Rameshbhai Jivanbhai Patel and another, 2008(4)R.C.R. (Civil) 487, wherein the principles for giving increase on yearly basis have been